Trade, Technique and Composition Effects: What is Behind the Fall in World-Wide SO2 Emissions 1990-2000?

40 Pages Posted: 3 Oct 2007 Last revised: 21 Feb 2014

See all articles by Jean-Marie Grether

Jean-Marie Grether

University of Neuchatel - Institute for Economic and Regional Research (IRER)

Nicole A. Mathys

University of Neuchatel - Faculty of Economics and Social Sciences; Federal Office for Spatial Development

Jaime de Melo

University of Geneva - Department of Political Economics; Centre for Economic Policy Research (CEPR); World Bank

Multiple version iconThere are 2 versions of this paper

Date Written: October 2007

Abstract

Combining unique data bases on emissions with sectoral output and employment data, we study the sources of the fall in world-wide SO2 emissions and estimate the impact of trade on emissions. Contrarily to concerns raised by environmentalists, an emission-decomposition exercise shows that scale effects are dominated by technique effects working towards a reduction in emissions. A second exercise comparing the actual trade situation with an autarky benchmark estimates that trade, by allowing clean countries to become net importers of emissions, leads to a 10% increase in world emissions with respect to autarky in 1990, a figure that shrinks to 3.5% in 2000. Additionally, back-of-the-envelope calculations suggest that emissions related to transport are of smaller magnitude, roughly 3% in both periods. In a third exercise, we use linear programming to simulate extreme situations where world emissions are either maximal or minimal. It turns out that effective emissions correspond to a 90% reduction with respect to the worst case, but that another 80% reduction could be reached if emissions were minimal.

Keywords: Trade, growth, environment, decomposition, embodied

JEL Classification: F11, Q56

Suggested Citation

Grether, Jean-Marie and Mathys, Nicole Andréa and de Melo, Jaime, Trade, Technique and Composition Effects: What is Behind the Fall in World-Wide SO2 Emissions 1990-2000? (October 2007). FEEM Working Paper No. 93.2007. Available at SSRN: https://ssrn.com/abstract=1018444 or http://dx.doi.org/10.2139/ssrn.1018444

Jean-Marie Grether (Contact Author)

University of Neuchatel - Institute for Economic and Regional Research (IRER) ( email )

Pierre-a-Mazel 7
Neuchatel, CH-2000
Switzerland
+41 32 718 13 56 (Phone)
+41 32 718 14 01 (Fax)

Nicole Andréa Mathys

University of Neuchatel - Faculty of Economics and Social Sciences ( email )

Neuchatel, 2000
Switzerland

Federal Office for Spatial Development ( email )

Jaime De Melo

University of Geneva - Department of Political Economics ( email )

40, boulevard du Pont-d'Arve
Geneva 4, CH-1211
Switzerland
+41 22 705 8273 (Phone)
+41 22 705 8293 (Fax)

HOME PAGE: http://www.unige.ch/ses/ecopo/demelo/Jaime.html

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

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