Environmental overhead of labor (EOL) embodied in Trade: The case of 2002 China-U.S. trade

International trade is recognized as a mechanism to optimally allocate resources including capital, labor, and materials at the global scale. Recently there has been increasing interest in the embodied environmental impacts of international trade, especially in emissions embodied in trade. Focusing on the environmental side, it is standard to ignore the environmental overhead of the labor (EOL), environmental impacts of household consumption by workers, associated with manufacturing. The argument (usually implicit) is that labor is a social good and thus its implications are allocated to social rather than environmental issues. It can thus be argued that employees´ work and life styles and associated environmental impacts are essential to the understanding of environmental impacts embodied in trade. In this article, we quantitatively study the EOL, in particular energy use and CO₂ emissions, embodied in trade between the U.S. and China in 2002 using environmental input-output analysis.