International Trade Drives Global Resource Use: A Structural Decomposition Analysis of Raw Material Consumption from 1990-2010

Abstract

Globalization led to an immense increase of international trade and the emergence of complex global value chains. At the same time, global resource use and pressures on the environment are increasing steadily. With these two processes in parallel, the question arises whether trade contributes positively to resource efficiency, or to the contrary is further driving resource use? In this article, the socioeconomic driving forces of increasing global raw material consumption (RMC) are investigated to assess the role of changing trade relations, extended supply chains and increasing consumption. We apply a structural decomposition analysis of changes in RMC from 1990 to 2010, utilizing the Eora multi-regional input-output (MRIO) model. We find that changes in international trade patterns significantly contributed to an increase of global RMC. Wealthy developed countries play a major role in driving global RMC growth through changes in their trade structures, as they shifted production processes increasingly to less material-efficient input suppliers. Even the dramatic increase in material consumption in the emerging economies has not diminished the role of industrialized countries as drivers of global RMC growth.