Factors influencing embodied energy trade between the Belt and Road countries: a gravity approach

Against the backdrop of current global collaboration on mitigating carbon emissions, how to reduce the energy uses in the Belt and Road Initiative area becomes an urgent and big challenge facing the global community. Using the Eora input-output database, this paper accounts the embodied energy trade between Belt and Road countries in 2015, followed by an investigation of the factors influencing the embodied energy trade through a panel gravity model. Global value chain participation and position are two newly considered factors in analyzing the determinants of embodied energy flow. We find that the main bilateral embodied flow paths are from South Korea to China, China to South Korea, Singapore to China, Ukraine to Russia, and Malaysia to Singapore. Five percent embodied energy flow paths account for 80% of the total bilateral embodied energy flow volume between Belt and Road countries. The gravity model results indicate that gross domestic product (GDP) per capita, population, global value chain participation are the key drivers of bilateral embodied energy trade, while the industrial share of GDP and global value chain position are negatively related to the trade. Energy intensity plays a crucial role in reducing the bilateral embodied energy flow. These results are useful in the policymaking of sustainable development for the Belt and Road Initiative.