Identifying Critical Sectors in the Restructuring of Low-Carbon Global Supply Chains

Based on recent events such as the COVID-19 pandemic and Russia/Ukraine conflict, global supply chain (GSC) restructuring has become an important issue for industries worldwide. To develop an effective CO2 reduction strategy through GSC restructuring, this study investigated the impacts of GSC restructuring in a specific sector on the industrial global carbon footprint. Through this process, this study developed a scenario-based hypothetical extraction method (HEM) into a practical and flexible framework with a focus on the scale of relevant GSC restructuring. As a case study, this study applied the practical HEM framework to the latest world input-output database in 2014 and estimated the impacts of restructuring Japanese and German automotive GSCs on CO2 emissions. The results indicated that the key sectors (i.e., suppliers) included in automotive GSCs can achieve significant CO2 emission reduction through relevant GSC restructuring. Additionally, the results highlighted practical CO2 reduction potentials based on a reasonable scale of relevant GSC restructuring, reflecting the substitutability of restructured sectors included in automotive GSCs. Based on these results, this study discusses practical strategies for CO2 mitigation through GSC restructuring and policy implications for low-carbon GSC restructuring