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Economic globalization and concomitant growth in international trade since the late 1990s have profoundly reorganized global production activities and related CO₂ emissions. Here we show trade among developing nations (i.e., South–South trade) has more than doubled between 2004 and 2011, which reflects a new phase of globalization. Some production activities are relocating from China and India to other developing countries, particularly raw materials and intermediate goods production in energy-intensive sectors. In turn, the growth of CO₂ emissions embodied in Chinese exports has slowed or reversed, while the emissions embodied in exports from less-developed regions such as Vietnam and Bangladesh have surged. Although China’s emissions may be peaking, ever more complex supply chains are distributing energy-intensive industries and their CO₂ emissions throughout the global South. This …