Benefit-principle accounting of CO₂ emissions in the global textile and clothing value chain

Abstract

Existing emission accounting frameworks assign CO₂ responsibility to producers or final consumers but do not identify factor-provider beneficiaries within bilateral trade flows. This study extends benefit-principle emissions (BPE) accounting by introducing a trade-pattern decomposition for the global textile and clothing (T&C) value chain. Using the multi-regional input-output table, the framework distinguishes producers, factor providers, final producers, and consumers, and separates final-goods, intermediate, and global value chain (GVC) trade. Consumer economies retain the largest single shares of their own T&C BPE. Developed-economy providers generally receive BPE above the consumption-based emissions (CBE) in their economies, while production-linked developing providers fall below. Bangladesh, the world's second-largest garment exporter, accounts for only 0.13% of EU-27 consumer T&C BPE despite its assembly role. Foreign factor-provider attribution rises in GVC-related trade, where assembly economies face higher CO₂ per dollar of factor-provider value added than in direct final-goods trade. Although final demand targets T&C products, emitted BPE concentrates in electricity, gas, and water, separating the consumer product from the emitting sector. Aggregate BPE-CBE ratios sit near parity for Bangladesh and selected developing-country pairs, while GVC-specific BPE exceeds CBE in most bilateral pairs. Bangladesh's economy-wide BPE exceeds its territorial emissions by 19%, showing that sectoral value capture and economy-wide balances can classify the same economy differently. Border carbon instruments based only on emission location or final-product origin can place compliance costs on actors capturing limited factor-provider benefit. Benefit-principle metrics give an additional diagnostic for border adjustment design, product-level disclosure, revenue recycling, and climate finance allocation.