Carbon and social impacts in the EU's consumption of fossil and mineral raw materials.

ABSTRACT

Fossil and mineral raw materials cause unintended and detrimental environmental and social impacts via extraction, production and combustion processes. In this study, we analyse how consumer demand in the European Union (EU) drives environmental and social impacts in mining sectors worldwide. We employ multi-regional input-output analysis to quantify positive (i.e., income, female and male employment) and negative (greenhouse gas emissions, accidents at work, and modern slavery) impacts of raw materials. We trace these environmental and social impacts across the EU's trading partners to identify sectoral and regional hotspots of international spillovers embodied in the EU's consumer demand. We estimate that the EU's consumption is associated with significant spillover impacts primarily in Central Asia, Asia Pacific, and Africa. We contextualise these results within a three-pillar framework to highlight the importance of a comprehensive and partnership-based approach to curbing environmental and social spillovers embodied in the EU's consumption of raw materials. Specifically, we highlight three potential practical policy strategies leveraging EU domestic instruments and regulations, strengthening the Green Deal and SDG diplomacy and financing, and promoting responsible consumption, recycling and innovation. Our results underline the need for further reforms in mining industries and trade policies to reduce adverse social and environmental impacts.