The methodological foundation of the study rests on two well-established traditions. Input-output analysis, first formulated by Wassily Leontief in the 1930s, captures the web of economic transactions linking every sector to every other: to produce one unit of output, a sector must consume inputs from others, each of which consumes inputs in turn, generating a cascade of indirect effects. By extending these tables with emissions coefficients, researchers can compute the total carbon dioxide released, directly and indirectly, whenever a sector produces goods for final consumption or export. Ecological network analysis, developed by ecologists such as Brian Fath and Robert Ulanowicz, adds a second layer of insight. Originally designed to study flows of energy and matter through ecosystems, it borrows concepts like control, dependency, and mutualism to ask not just how much carbon flows through an economy, but who dominates whom within the network of flows.

The researchers aggregated the economy into seven macro-sectors and computed pull and drive weights, network utility relationships, and control metrics across the entire regional system. Pull weights describe how strongly a sector draws carbon embodied in inputs from upstream suppliers, while drive weights measure how powerfully a sector pushes emissions downstream through its own demands. Network utility analysis assesses whether pairwise relationships between sectors are mutually beneficial or exploitative in flow terms, and control analysis identifies which sectors effectively govern the behavior of others. Together, these indicators transform a dense matrix of monetary transactions and emissions data into a structural map that resembles the hierarchy of a natural ecosystem, with producers, intermediaries, and apex consumers of carbon.

The results reveal a striking inefficiency at the heart of the region’s carbon metabolism. Rather than transmitting embodied emissions efficiently from primary producers to final consumers, ASEAN’s network structure allows intermediate sectors to absorb a significant portion of the carbon flowing through the system. In ecological terms, the metabolism is sluggish: carbon pools in the middle of the food web instead of passing cleanly through it. This stagnation matters for policy because it means that interventions aimed only at final consumers or only at raw producers would miss much of the region’s embedded emissions. The finding points instead toward intermediate manufacturing processes as critical leverage points where carbon can be either locked in or released, depending on the technologies and energy sources those sectors use.

At the top of the hierarchy, the study found that upstream primary sectors—agriculture, mining, and energy transformation—exert strong influence over everything downstream. These sectors act as the region’s primary producers in the ecological sense, anchoring the flow of embodied carbon that ultimately supports construction, manufacturing, and services. Their dominance means that decarbonization efforts targeting electricity generation and resource extraction would ripple through the entire network, whereas efforts confined to downstream sectors would struggle to propagate upstream. At the opposite end of the hierarchy, the construction sector emerged as the primary dependent sector, sitting at the bottom of the control hierarchy and drawing heavily on embodied carbon generated by others. Any building boom in the region, the analysis implies, transmits demand for carbon deep into the economy’s upstream foundations.

Perhaps the most consequential finding is that ASEAN, taken as a whole, is a net exporter of embodied carbon to the rest of the world. The goods the region ships abroad carry more embedded emissions than the goods it imports, meaning that a substantial share of the carbon released within ASEAN’s borders is generated on behalf of foreign consumers. This asymmetry has long been recognized in global carbon accounting debates, but its implications have sharpened dramatically with the arrival of border carbon adjustment mechanisms. The European Union’s Carbon Border Adjustment Mechanism, and similar instruments under consideration in other jurisdictions, are designed to charge importers for the embedded carbon in goods arriving from regions with weaker climate policies. For export-oriented ASEAN economies, the study’s findings read as a warning: the region’s carbon-intensive export chains are directly exposed to emerging carbon regulations.

The vulnerability is structural rather than incidental. Because upstream energy transformation and primary sectors control much of the network’s carbon flows, and because intermediate sectors absorb rather than pass on emissions, exporters cannot easily demonstrate clean supply chains even if final assembly becomes more efficient. Border carbon adjustments do not distinguish between a factory that has decarbonized and one embedded in a carbon-intensive grid; they measure the carbon embodied in the product. As long as ASEAN’s electricity mix remains fossil-heavy and its industrial intermediates carbon-intensive, the region’s manufacturers will carry a hidden carbon tariff risk regardless of their own operational improvements. The authors argue that this is why targeted grid decarbonization must be a regional priority rather than a national afterthought.

The study’s prescriptions extend beyond clean power. The authors highlight circular economy strategies in advanced manufacturing as a second pillar, noting that closing material loops within industrial networks can reduce the pull of embodied carbon from upstream extractive sectors. ASEAN has already adopted a framework for circular economy, and the network analysis provides a quantitative rationale for targeting it at the intermediate sectors where carbon flows currently stagnate. The third pillar is governance: harmonized regional carbon accounting. If each ASEAN member measures embodied carbon differently, the region cannot present a coherent response to border adjustments, and firms face conflicting reporting requirements across markets. A common accounting standard would allow the region to negotiate from a position of shared evidence rather than fragmented estimates.

The analytical framework itself is part of the study’s significance. Ecological network analysis has been applied to urban metabolism in Beijing, energy systems in Guangdong, and circular economy performance at the city level, but comprehensive multi-regional applications spanning ASEAN have been scarce. By combining the Asian Development Bank’s multi-regional input-output tables with environmental extensions covering air emissions, the researchers demonstrate that the tools of ecosystem science can be scaled to an entire trade bloc. The approach also offers interpretability advantages over black-box optimization models: network metrics like control and utility produce statements about sectoral relationships that policymakers can examine, contest, and act upon, rather than opaque numerical prescriptions.

The broader lesson is that climate policy and trade policy are now inseparable, and that understanding an economy’s structure—not just its total emissions—determines its resilience in a carbon-regulated world. ASEAN’s position as a net embodied carbon exporter is not merely an accounting curiosity; it is a measure of how much of the region’s industrial future depends on rules being written elsewhere. The study’s metabolic metaphor ultimately delivers a practical message: a food web with bloated intermediaries and dominant primary producers responds slowly to change, and an economy shaped the same way will respond slowly to decarbonization. Reshaping those flows—through cleaner grids, circular manufacturing, and shared carbon accounting—offers the region a path to keep its export engines running as the global economy begins charging for every tonne of carbon embodied in the goods it buys.

Subject of Research: Embodied carbon flows in ASEAN economies analyzed with input-output and ecological network analysis

Article Title: Multi-regional ecological network analysis of ASEAN’s carbon metabolism

Article References: Gue, I. H. V., Teng, J. R. C., Li, M., & Tan, R. R. (2026). Multi-regional ecological network analysis of ASEAN’s carbon metabolism. Clean Technologies and Environmental Policy, 28(11), Article 272. https://doi.org/10.1007/s10098-026-03627-0

Image Credits: AI Generated

DOI: 10.1007/s10098-026-03627-0

Keywords: ASEAN, embodied carbon, ecological network analysis, multi-regional input-output, carbon border adjustment, carbon metabolism, supply chain emissions, grid decarbonization, circular economy, carbon accounting, global value chains, climate policy

The circular economy has become the dominant framework for reforming the fashion and textile industry, which produces an estimated 92 million tonnes of textile waste annually and recycles less than 1 percent of clothing into new fibres, according to the Ellen MacArthur Foundation’s landmark New Textiles Economy report. Policy instruments such as the European Union’s Ecodesign for Sustainable Products Regulation and India’s own Business Responsibility and Sustainability Reporting framework promise longer product life cycles, local material systems, and community-anchored production. But the dominant narrative centres on industrial transformation in the Global North: recycling infrastructure, take-back programmes, and fibre-to-fibre loops operated by formal, traceable, ESG-reportable firms. That assumption, the new paper contends, simply does not hold in India, where the craft textile sector employs an estimated 113 lakh workers, nearly 72 percent of them women, overwhelmingly in informal household production.

To measure the problem, the researchers built two original composite indices grounded entirely in verified, publicly available official data. The first, the GI-CE Institutional Alignment Score, measures how far the statutory provisions of India’s Geographical Indications Act of 1999 mandate circular-economy-compatible supply chains across 25 GI-registered textile products, from Kanchipuram silk to Banarasi brocades. The second, the Circular Informality Exposure Index, measures how vulnerable the artisans in those clusters are to the social risks of circular transition. The data sources are legally anchored and temporally consistent: the GI registry maintained by the Controller General of Patents, Designs and Trade Marks, the Fourth All India Handloom Census 2019-20, the Periodic Labour Force Survey Annual Report 2023-24, and the Securities and Exchange Board of India’s BRSR framework documents.

The results reveal a striking paradox. The GI-tagged craft textile clusters score consistently high on institutional circular alignment, with a mean score of 4.36 out of 5. This is no accident: the GI Act legally requires geographic input localisation, community-based producer organisation, and natural or traditional input specification, properties that structurally replicate every definitional criterion of a circular supply chain. Yet the workers inside these institutionally circular systems are among the most socially vulnerable in India’s manufacturing economy. Average daily earnings across the five-state handloom and handicraft economy surveyed by the Institute for Human Development and Crafts Council of India stand at just 270 rupees, well below minimum wage in every Indian state. Only 8.8 percent of weaver households access markets through cooperatives, and nine out of ten women in Indian manufacturing work in informal enterprises without contracts or social security.

Cross-referencing the two indices produces the study’s central empirical finding: nine of the 25 clusters, or 36 percent of the sample, fall squarely into the circular informalization trap, combining high institutional circular alignment with high informality exposure. These trapped clusters cluster geographically in two contexts: the North Indian plains, including Uttar Pradesh, Punjab, and Rajasthan, where cooperative market channel use falls below the national median and female part-time weaver concentration exceeds the average of 60.6 percent; and recently registered tribal textiles from the Northeast, such as Garo and Tangsa weaves, where the authorised user mechanism that should guarantee producer traceability has not yet been operationalised. No product fell into the low-alignment quadrants, reflecting how thoroughly the statute itself embeds circular design.

The deepest structural gap lies in environmental, social, and governance disclosure. SEBI’s BRSR framework, mandatory since the 2022-23 financial year for India’s top 1,000 listed companies by market capitalisation, requires comprehensive reporting across 140 questions, including human rights, labour practices, and supply chain conduct, with the BRSR Core adding 49 measurable key performance indicators and third-party assurance for the largest firms. But because the framework’s scope is defined by market capitalisation, no handloom cooperative, tribal craft association, or GI-registered producer group falls within it. All 25 clusters scored maximally on the ESG disclosure exclusion dimension of the informality index. The firms whose supply chains depend on artisan labour must disclose their ethics; the artisans who perform that labour remain entirely outside the disclosure perimeter, a disjunction the authors call the relative ESG discourse-labour asymmetry.

The gendered dimensions of this trap are particularly consequential. India’s female labour force participation rate has risen sharply, from 23.3 percent in 2017-18 to 41.7 percent in 2023-24, but the increase has been driven predominantly by rural self-employed women, more than 80 percent of them in agriculture or household-based production. The handloom sector, with its 72 percent female majority, part-time household structure, and chronic underemployment of 208 person-days per year, exemplifies this expansion of informal self-employment rather than gender-equalising formal job growth. The circular transition could carry a genuine gender dividend, since it raises the value of precisely the provenance, natural inputs, and durable craftsmanship that women artisans produce. But if circular premiums are captured by intermediaries and formal firms instead, women would bear the informality costs while the formal economy appropriates the circular value.

The trap also operates globally. European regulations, including Digital Product Passports under the Ecodesign regulation, corporate sustainability due diligence directives, and a proposed Forced Labour Regulation, are creating new traceability demands for textile imports. GI-registered Indian craft textiles are, by institutional design, exceptionally well positioned to meet them: authorised user registration provides producer identity, statutory collective applicant requirements provide community organisation, and Form GI-1 specifications document natural inputs. The authors argue that recognising GI registration as equivalent to Digital Product Passport compliance could satisfy EU requirements at a fraction of the cost industrial firms face, yet this compatibility remains invisible to European policymakers, Indian trade negotiators, and the corporations involved. Similar structural conditions, an origin-certification framework, a feminised informal workforce, and ESG rules scoped to formal entities, exist in Indonesia’s batik clusters, Peru’s Andean textile geographical indications, and among West African kente producers, suggesting the trap may be a global regularity rather than an Indian anomaly.

Crucially, the study insists that closing the gap requires no new legislation, infrastructure, or institutions, only the political will to connect systems that already exist. The authors advance four targeted recommendations. SEBI could amend BRSR Core leadership indicators by circular, making disclosure of GI-registered and informal artisan supply chain tiers mandatory rather than voluntary for large listed textile firms. The Department for Promotion of Industry and Internal Trade and the Ministry of Textiles could jointly issue a GI-CE Equivalence Framework, mapping statutory GI requirements onto circular procurement criteria and green finance access. The National Cooperative Development Corporation could extend cooperative market channel access from 8.8 percent to 25 percent of weaver households within five years, prioritising the trapped clusters and using existing artisan identity data for outreach. And in European Union-India free trade negotiations, GI-Digital Product Passport equivalence could be tabled as a technical annex, directly rewarding the institutional architecture India’s craft sector already possesses.

The broader lesson extends far beyond textiles. The circular economy is routinely framed as a redesign challenge, a matter of recycling plants and business models, but this research demonstrates that governance architecture, not technology, determines who benefits from sustainability transitions. India’s Geographical Indication system has already designed a circular supply chain; the Handloom Census has already documented the cooperative forms that could channel circular premiums to producers; and the BRSR framework has already built the disclosure infrastructure that could make artisan labour visible. What is missing is the linkage between them. Without it, the world’s most circular textiles will continue to be made by some of its most precarious workers, and the sustainability revolution will reproduce the very inequalities it claims to solve. The authors call for extending their dual-index framework to other developing economies and for primary cluster-level research to test whether cooperative organisation mediates between institutional alignment and artisan income, questions that the forthcoming Fifth All India Handloom Census will help answer.

Subject of Research: Circular economy governance and feminized informal labour in India's GI-registered textile clusters

Article Title: Institutional pressures link circular economy governance and feminized informality in India’s geographical indication registered textile clusters

Article References: Institutional pressures link circular economy governance and feminized informality in India’s geographical indication registered textile clusters. (n.d.). https://doi.org/10.1007/s44282-026-00619-9

Image Credits: AI Generated

DOI: 10.1007/s44282-026-00619-9

Keywords: circular economy, geographical indications, handloom, feminized informality, ESG disclosure, BRSR, textile clusters, India, social sustainability, global value chains, artisan welfare, institutional theory

The intellectual engine behind the study is what scholars call the renewables pull effect, a concept first introduced by Samadi and colleagues in 2023. The idea is deceptively simple: because renewable electricity is far cheaper in some regions of the world than in others, and because transporting energy itself is expensive, industries that consume enormous quantities of energy may be economically compelled to move their production to where the sun shines and the wind blows hardest. Previous techno-economic modeling had quantified this pull with striking precision. Egerer and colleagues calculated that relocating entire steel value chains to renewable-rich sites could cut costs by up to 19 percent, while for urea the savings could reach 30 percent. Verpoort and colleagues arrived at similar figures, reporting savings of 18 percent for steel and 32 percent for urea. Yet both teams cautioned that cost models alone could not capture the full picture, and that strategic considerations might ultimately determine which parts of a value chain are worth moving.

Colen and Mohnen set out to fill exactly that gap. Their methodology was deliberately qualitative, reflecting the hypothetical and fast-moving nature of green relocation decisions. The researchers conducted two rounds of interviews between January and April 2025, totaling 2,827 minutes of transcribed material. The first round involved 28 European experts, drawn from both renewable-rich and renewable-scarce countries, while the second round gathered perspectives from 32 experts in nearly all non-European regions identified as potential relocation destinations, including Canada, the Middle East, Australia, and parts of Africa and South America. All participants were required to have at least ten years of professional experience in or closely connected to the relevant industries and to be positioned near strategic decision-making processes. The researchers then applied an abductive thematic analysis, deriving 25 first-order codes that were condensed into nine second-order codes, and supplemented the interview data with trade statistics from the World Steel Association and the World Integrated Trade Solution database.

The interviews revealed three powerful global tendencies reshaping green value chains. The first is a sustainable transition that continues but has visibly decelerated. Experts described green projects being cancelled or postponed, particularly in the United States under a revived fossil fuel agenda, while European climate regulation also shows signs of easing. One expert noted bluntly that many current political leaders care only about cheap electricity, not how it is produced. Economic fundamentals compound the slowdown: renewable-based industrial production typically remains more expensive than fossil-based alternatives, and several interviewees observed a shift toward natural gas-based direct reduced iron and blue hydrogen with carbon capture. The second tendency is rising cost pressure, driven by global overcapacities, especially China’s expansion in low-cost steel, and by recession fears in key downstream sectors such as automotive, which had previously been willing to pay a green premium. The third tendency is a growing political ambition for energy and resource independence, with experts reporting that international dependencies are increasingly viewed as strategic risks in the wake of the Russia-Ukraine war and protectionist trade policies.

Against this backdrop, the strategic assessment of relocation scenarios produced a clear verdict. The experts overwhelmingly rejected two options that cost models had treated as plausible: producing green hydrogen locally in renewable-scarce Europe, and importing green hydrogen at scale. Local production fails because of fundamental physical constraints. As one expert put it, there is simply not enough space for sufficient renewable energy installations to cover all future, even growing, demand, and lower capacity factors keep energy prices uncompetitive. Importing hydrogen fails for a different reason: hydrogen’s physical properties make transport so costly that, in the words of one interviewee, the transportation of green hydrogen is, and very likely will always be, too expensive. Long-term subsidies to bridge that gap were judged politically unsustainable, with one expert concluding that taxpayer money per saved job simply cannot be justified in the long term. The recent decision by ArcelorMittal to halt plans for direct reduced iron production in Germany, despite 1.3 billion euros in pledged government support, illustrates how even substantial subsidies cannot offset structural energy-cost disadvantages.

What remains are two scenarios that involve relocating energy-intensive production steps to renewable-rich regions and shipping the products back to Europe. For green steel, the experts favored the shallower option: relocating only iron production, in the form of direct reduced iron or hot-briquetted iron, while retaining steelmaking in Europe. The reasoning is strategic rather than purely economic. Keeping steelmaking close to customers safeguards quality control for high-performance applications, protects proprietary production expertise, and preserves the ability to incorporate recycled steel scrap, a resource several experts expect to become the object of a looming global fight. Political considerations reinforce this choice, since steel’s importance for infrastructure and defense makes governments more likely to subsidize domestic production, and steelmaking employs substantially more workers than iron production. For green urea, by contrast, the balance tilts toward the deeper option of relocating both ammonia and urea production entirely. Urea is a standardized, transportable fertilizer with little need for customization, quality control and intellectual property concerns are weaker, and the cost savings from full relocation are larger. As one expert observed, for politicians, losing steel simply feels emotionally harder than losing chemicals.

From these findings the authors derive a novel value chain positioning model that classifies regions by their position along the value chain, distinguishing upstream, downstream, and full positions, and marking whether regional demand exceeds or falls short of local production. Applied to the global landscape, the model yields a tripartite strategy for European energy-intensive industries: consolidate high-quality downstream production at home, maintain minimal full value chain capacity in renewable-rich European regions such as the Nordics and Iberia, and globally diversify upstream imports through green relocation. Canada emerges as a prime target, offering vast hydropower resources, high-grade iron ore, small domestic demand, and an active search for new markets. The Middle East combines strong renewable potential with financial capability, and Qatar and Saudi Arabia are already developing gas-based direct reduction plants as a bridge to hydrogen, though experts warn that over-reliance could create new dependencies. Most developed countries in Africa and South America offer high potential but require investment, infrastructure, and stability, with Brazil combining high-grade ore and hydropower alongside high energy costs and slow industrial uptake.

Equally revealing is the list of regions the experts consider unattractive. The United States, China, and India are all consolidating toward full value chain positions driven by domestic industrial ambitions, making them unreliable long-term suppliers for European markets. The United States seeks self-sufficiency in steel and urea supported by abundant gas and large scrap availability, while China is expected to become greener but only for its own supply chains, constrained by entrenched blast furnace capacity and limited scrap. India is expanding toward a full position but will likely redirect capacity toward its own growing markets over time. Australia, though rich in renewables and raw materials, faces high costs and geographic proximity that favors Japan and South Korea as natural customers. The experts’ warning is pointed: although there is no Saudi Arabia of renewables, European policymakers must work to prevent the replacement of old energy dependencies with new ones.

The broader implications stretch well beyond steel and fertilizer. The study documents a fundamental tension between the cost-efficiency imperative that governs globally competitive firms and the autarky-resilience ambitions of nation-states, a tension that is likely to shape industrial location decisions across a wide spectrum of sectors. The authors propose three preliminary propositions for future quantitative research: that strategically favorable relocation depth differs systematically by product type, that rising geopolitical volatility causes market access and resilience to override pure cost efficiency, and that upstream-oriented, export-focused regions make more attractive relocation partners than full value chain consolidators. For practitioners, the guidance is concrete: European steelmakers could phase out domestic direct reduction while upgrading electric arc furnace capacity, secure scrap domestically through circular economy models, and pursue hot-briquetted iron imports, while urea producers face relocation to co-located green hydrogen, ammonia, and urea sites abroad as the most viable path absent stronger political intervention. For policymakers, the prescription includes stable climate frameworks, support for shifting uncompetitive upstream plants toward renewable-rich European regions, expanded partnerships through instruments like the EU’s Global Gateway, and harmonized definitions of what counts as green. In an era when, as one expert put it, you cannot trust even your alliances anymore, strategies that preserve optionality, even at higher short-term cost, may prove to be the most valuable asset of all.

Subject of Research: Strategic green relocation of energy-intensive industrial value chains in response to renewable energy resource distribution

Article Title: Strategic considerations for green relocation in energy-intensive global value chains

Article References: Colen, S., & Mohnen, A. (2026). Strategic considerations for green relocation in energy-intensive global value chains. Journal of Industrial Ecology, 30(4), 1951-1969. https://doi.org/10.1007/s44498-026-00133-w

Image Credits: AI Generated

DOI: 10.1007/s44498-026-00133-w

Keywords: green relocation, renewables pull effect, green hydrogen, green steel, direct reduced iron, hot-briquetted iron, green urea, global value chains, industrial ecology, energy-intensive industries, energy security, decarbonization

The research tackles a long-standing blind spot in climate economics. When a country exports goods, the emissions generated in producing them are counted in the exporting nation’s territorial inventory, even though the goods are consumed elsewhere. This mismatch, known as the problem of embodied or trade-embedded emissions, has been studied extensively since Davis and Caldeira’s landmark consumption-based accounting work, but most analyses treat exports as a single undifferentiated flow. Ünal and Erkök argue that this flattening hides the very information policymakers need. An export of finished consumer goods and an export of intermediate components that feed a partner’s own industrial production have very different implications for how carbon pricing, border adjustments, or supply chain regulations will shift emissions between countries.

To unpack these differences, the authors deploy an environmentally extended input-output framework built on the Eora Global Supply Chain Database, combined with a technique called the Multi-Stage Hypothetical Extraction Method. Hypothetical extraction is a thought experiment rendered in matrix algebra: the analyst mathematically removes a sector, or a demand channel, from the economy’s input-output structure and measures how much output and, in this case, how much carbon dioxide the rest of the system loses as a result. The difference between the original economy and the extracted one quantifies the sector’s total systemic importance, capturing both its direct emissions and the emissions embedded in all the upstream linkages that depend on it. The multi-stage refinement goes further by decomposing exports into intermediate goods and final goods, and by splitting final demand into household consumption, government expenditure, and investment channels, allowing emissions to be traced along distinct domestic production stages for each destination market.

The study focuses on six major trading partners of Türkiye: France, Germany, Iraq, Italy, the United Kingdom, and the United States. This selection spans the European Union markets that dominate Turkish trade, the transatlantic relationship, and a neighboring energy economy, providing a diverse test bed for the method. For each partner, the researchers calculated the carbon dioxide emissions embodied in Turkish exports and, crucially, a set of efficiency measures that relate those emissions to the economic value delivered. It is the efficiency dimension that produced the study’s most alarming headline result: a systemic deterioration in carbon dioxide efficiency across most destinations, meaning that progressively more emissions are being generated per unit of export value delivered to these markets.

The structural decomposition reveals that intermediate goods typically dominate the emissions profile of Turkish exports. This matters because intermediate goods occupy a particularly awkward position in climate policy. They cross borders as inputs to further production, so their embodied carbon will only be fully accounted for when the final product is eventually sold, often in a third country. Under mechanisms such as the European Union’s Carbon Border Adjustment Mechanism, which is designed to prevent carbon leakage by pricing the embedded emissions of imports, the treatment of intermediate goods remains one of the most contested design questions. The finding that Türkiye’s export emissions concentrate in these upstream flows suggests that the country’s industrial base is deeply integrated into European and global value chains in ways that make it structurally exposed to any tightening of carbon accounting at the border.

The United Kingdom emerges as a distinctive case. Unlike the other partners, where either intermediate or final goods tend to dominate, the UK’s import profile from Türkiye shows a broad reliance on both categories simultaneously. This dual dependence means that British demand pulls carbon out of the Turkish economy through two separate channels at once, amplifying the total systemic liability and complicating any single-lever policy response. As the UK develops its own post-Brexit carbon border policies, the study’s results imply that Turkish exporters will face pressure from both ends of their product mix rather than from a single vulnerable segment.

Perhaps the most striking results concern the role of government demand, which behaves in sharply different ways depending on the partner. In France and Italy, state-procured government expenditures drive intense emissions liabilities, channeled primarily through Türkiye’s petroleum and chemical sectors. In other words, when the French or Italian state buys goods with Turkish content, the production cascade that follows leans heavily on some of the most carbon-intensive links in the Turkish industrial chain. By contrast, in Iraq and the United States, government expenditure acts less as a direct trigger and more as a deep systemic dependency, anchored in the utility and heavy manufacturing sectors. These partner-specific patterns demonstrate that the same category of final demand can produce qualitatively different carbon consequences depending on the industrial structure it activates, a nuance that aggregate trade-emissions statistics completely obscure.

Underlying all of these patterns is a remarkably concentrated industrial structure. Four sector groups account for the dominant shares of the efficiency effects the authors measure: textiles, transport equipment, petroleum and chemical products, and electricity and gas provisions. This concentration is both a vulnerability and an opportunity. It is a vulnerability because it means Türkiye’s export carbon footprint is not broadly distributed across the economy but is instead pinned to a handful of energy-intensive nodes, several of which are precisely the sectors most likely to be targeted by carbon border measures and by competition from lower-carbon producers. It is an opportunity because targeted interventions at a small number of chokepoints, such as decarbonizing the electricity and gas supply that feeds industrial production, or modernizing petroleum and chemical processing, could deliver disproportionate improvements in the carbon efficiency of the entire export apparatus.

The authors draw a clear policy conclusion from this structure: mitigation efforts must be targeted and partner-specific rather than uniform. Because the emissions liabilities attached to French government procurement arise through different sectors than those attached to American systemic dependencies, a single national decarbonization strategy will not address all exposures equally. Instead, the findings argue for industrial policies and technological investments calibrated to the specific production stages and demand channels that generate the largest efficiency losses for each destination. The open availability of the study’s processed datasets and analysis code in a public GitHub repository lowers the barrier for other researchers to extend the multi-stage extraction approach to other economies, and the method itself, which links classical linkage analysis in the tradition of Hirschman and Rasmussen to modern environmental accounting, offers a template for dissecting how carbon flows through the layered stages of globalized production.

As carbon border regulations spread and trading partners begin pricing the emissions embedded in imports, studies of this kind are likely to become essential reading for policymakers in emerging industrial economies. The Turkish case shows that the question is no longer simply how much carbon a country exports, but through which sectors, along which production stages, and in response to whose demand. Answering that question with the granularity that the multi-stage hypothetical extraction method provides may determine which economies adapt smoothly to a carbon-constrained trading system and which find their industrial linkages transformed into liabilities overnight.

Subject of Research: Export-embodied CO2 emissions and carbon leakage in Turkiye's trade analyzed via multi-stage hypothetical extraction

Article Title: Sectoral linkages and carbon leakage: A multi-stage hypothetical extraction analysis of export-embodied emissions

Article References: Ünal, E., & Erkök, B. (2026). Sectoral linkages and carbon leakage: A multi-stage hypothetical extraction analysis of export-embodied emissions. Journal of Industrial Ecology, 30(4), 2189-2207. https://doi.org/10.1007/s44498-026-00149-2

Image Credits: AI Generated

DOI: 10.1007/s44498-026-00149-2

Keywords: carbon leakage, embodied emissions, input-output analysis, hypothetical extraction method, Turkiye, international trade, CO2 efficiency, intermediate goods, carbon border adjustment, industrial policy, global value chains, Eora database

The research is grounded in an in-depth qualitative case study of the Brazilian plastic packaging sector, one of the largest in the Global South. The empirical base consists of ten semi-structured interviews with actors spanning the value chain, from packaging producers to recyclers and institutional stakeholders, supplemented by twenty-seven secondary sources including webinars, lectures, and industry events. The analytical coding structure was applied to identify patterns of upgrading across firms and their networks. Full interview recordings remain confidential because the combination of participants’ professional positions and accounts of specific circular initiatives could allow deductive identification, but de-identified excerpts supporting the findings are reported in the manuscript.

The study’s central contribution is the identification of three distinct and markedly uneven pathways of circular upgrading. The first is design and material upgrading led by focal firms, typically the large packaging manufacturers and brand owners with the resources to reformulate products, substitute conventional polymers, and introduce mono-material constructions. The second is process upgrading, in which firms improve internal efficiency and tighten control over material loops within their own operations. The third is network-dependent recovery and recirculation, which requires coordinated action across collectors, cooperatives, recyclers, municipalities, and regulators. The crucial asymmetry, the authors find, is that the first two pathways sit largely under the control of individual firms, while the third depends on collective infrastructure and institutional arrangements that Brazil, like many Global South economies, does not reliably provide.

The theoretical machinery behind this conclusion comes from the governance framework of global value chains. In that framework, the complexity of transactions, the ease with which they can be codified, the capabilities of suppliers, and the degree of coordination required jointly determine how value chains are governed, from arm’s-length markets to captive and hierarchical relationships. Costa and Scur extend this logic to circularity. Circular upgrading in design and materials, for instance, is tractable for focal firms because transactions with suppliers can be specified, codified, and monitored. By contrast, circular upgrading in recovery and recirculation involves transactions of high complexity that resist codification and depend on capabilities that are dispersed and unevenly distributed across informal waste pickers, small recyclers, and municipal systems.

Brazil’s institutional landscape plays a decisive role in these outcomes. The country’s National Solid Waste Policy, established by federal law in 2010, introduced the principle of shared responsibility for the product lifecycle and mandated reverse logistics systems, yet implementation has been fragmented and uneven. A 2021 law created incentives for recycling through fiscal mechanisms, but the researchers find that regulatory limitations continue to constrain network-dependent pathways. Informality compounds the problem: millions of waste pickers, or catadores, perform the frontline work of material recovery, often outside formal contracts, without guaranteed quality standards, and with limited bargaining power in the value chain. This informal foundation keeps the recovery loop partially functional but unstable, undermining the traceability and consistent recyclate quality that industrial buyers require for circular inputs.

The findings illustrate a broader pattern in Global Value Chain scholarship: power is unevenly distributed, and focal firms can impose requirements on suppliers while remaining insulated from the weakest links. In the Brazilian case, focal firms can demand recyclable designs and cleaner inputs from their supplier base, and they can audit process improvements within their own facilities. But they cannot, on their own, build curbside collection networks, formalize waste picker cooperatives, or guarantee the institutional stability that large-scale material recirculation demands. The result is a circular economy with a missing middle: sophisticated eco-design at one end, and a patchwork of informal recovery at the other, without the codified, quality-assured reverse logistics infrastructure that connects the two.

That infrastructure deficit has technical consequences, not merely administrative ones. Without reliable collection streams, recovered plastics arrive contaminated and heterogeneous, raising processing costs and lowering the quality of recyclate. Without codification of material specifications across the chain, downstream buyers cannot verify whether recycled content meets food-contact or performance standards. The study shows that these transactional failures are exactly what Global Value Chain theory predicts when capability gaps meet weak institutional coordination. Circular economy initiatives that focus exclusively on firm-level innovation, the authors warn, will keep colliding with these structural limits, because circularity is not a property of individual companies but of interconnected arrangements spanning technical, organizational, and institutional dimensions.

The comparative context sharpens the lesson. Prior studies of plastic packaging in Europe, Italy, Taiwan, and the United States have documented how mature extended producer responsibility schemes, standardized collection, and formal reverse logistics enable higher recirculation rates. In the Global South, by contrast, research has emphasized the pivotal role of informal recycling sectors and the co-creation of circular economy research agendas attentive to local conditions. Costa and Scur’s Brazil case bridges these literatures by showing precisely where the value chain severs: not at the design table, where focal firms have made genuine progress, but in the recovery and recirculation segments where network coordination and public capacity are essential. The pathway analysis thus offers a diagnostic template that can be applied to other Global South economies where similar informal-institutional configurations prevail.

For policymakers, the implications are concrete. Strengthening network-dependent pathways will require more than awareness campaigns or voluntary commitments. It demands investment in collection infrastructure, mechanisms to formalize and support waste picker cooperatives, codification of recyclate specifications that industry can transact upon, and regulatory enforcement that gives reverse logistics obligations teeth. For firms, the study suggests that design and process upgrading should be coupled with deliberate network-building, such as co-investment in sorting facilities and quality systems, since unilateral firm-level circularity cannot close loops that span the entire chain. For researchers, the work demonstrates the analytical value of marrying Global Value Chain governance concepts with Global Production Network perspectives that capture state and civil society actors alongside firms.

The research, supported by the São Paulo Research Foundation and the Coordination for the Improvement of Higher Education Personnel in Brazil, ultimately reframes the debate about plastics in the Global South. The question is not whether companies want to go circular, but whether the governance conditions exist to let circular materials, information, and value flow across a fragmented chain. In Brazil’s plastic packaging industry, the answer is a qualified yes at the level of the firm and a resounding not yet at the level of the network. Closing that gap, the study concludes, will require treating circularity as a collective achievement built on shared institutions, rather than a badge that individual firms can earn alone.

Subject of Research: How governance structures and institutional conditions shape circular economy upgrading pathways in the Brazilian plastic packaging value chain.

Article Title: Governance and upgrading in plastic packaging in the Global South: evidence from Brazil

Article References: Costa, L., & Scur, G. (2026). Governance and upgrading in plastic packaging in the Global South: evidence from Brazil. Journal of Industrial Ecology. https://doi.org/10.1007/s44498-026-00162-5

Image Credits: AI Generated

DOI: 10.1007/s44498-026-00162-5

Keywords: circular economy, plastic packaging, global value chains, governance, Brazil, Global South, circular upgrading, recycling, reverse logistics, informal waste sector, industrial ecology, sustainability