Emissions embodied in international trade have grown alongside the fragmentation of global value chains. This raises a question: is the growth in a country’s export-related emissions driven more by producing final goods for foreign consumers, or by supplying intermediate inputs to foreign producers? Conventional structural decomposition analysis (SDA) treats a country’s export-related intermediate production as a single term and cannot separate these two sources. We extend additive SDA to split this term into a final-use channel (the domestic production behind exports consumed abroad) and an intermediate-use channel (the country’s intermediate exports absorbed into foreign production).
