Double-edged sword of technological progress to climate change depends on positioning in global value chains

Abstract

Technological progress (TP) is a double-edged sword to global climate change. This study for the first time reveals rebound and mitigation effects of efficiency-related TP in global value chains (GVCs) on greenhouse gas (GHG) emissions. The integrated effects of TP depend on the positioning of sectors in GVCs. The cost-saving TP in upstream sectors would stimulate downstream demand. This produces stronger rebound effects than mitigation potentials and leads to global GHG emission increments (e.g. TP in the gas sector of China and petroleum and coal products sector of South Korea). In contrast, sectors located in the trailing end of GVCs have greater potentials for GHG emission mitigation through TP, mainly due to the reduction of upstream inputs. (e.g. the construction sector of China and dwelling sector of the United States). Global GHG emissions and production outputs can be either a trade-off or a win-win relationship on account of TP than rebound effects, because TP in different sectors could possibly increase or decrease the emission intensity of GVCs. This study could recognize the most productive spots for GHG emission mitigation through efficiency-related TP. It provides a new perspective for international cooperation to promote global GHG emission mitigation.