CO2 Embedded in Trade: Trends and Fossil Fuel Drivers

37 Pages Posted: 7 Jun 2017

See all articles by Sylvain Weber

Sylvain Weber

University of Neuchatel - Institute for Research in Economics (IRENE)

Reyer Gerlagh

Tilburg University - Tilburg University School of Economics and Management

Nicole A. Mathys

Government of the Swiss Confederation - Swiss Federal Office of Energy; University of Neuchatel

Daniel D. Moran

Norwegian University of Science and Technology (NTNU)

Multiple version iconThere are 2 versions of this paper

Date Written: January 2017

Abstract

The amount of CO2 embedded in trade has substantially increased since 1990. We study the trends and some drivers over the period 1995-2009. We find that traded goods tend to have higher emission-intensities compared to average final demand. The second finding is that independently of sector structure, dirty countries tend to specialize in emission-intensive sectors. This finding suggests a comparative advantage mechanism for CO2 and lends support to the hypothesis that trade liberalization tends to increase global emissions. The third finding is that, on average, emission-intensive countries have shifted from trade deficits to surpluses, so a larger share of goods is now produced in emission-intensive countries, consequently increasing global emissions. Finally, our analysis points to coal abundance as an important driver for high levels of both domestic emissions per value added and sector specialization into emission-intensive sectors. Hence coal abundance is an important driver of net CO2 exports.

Keywords: CO2 Embedded in Trade, Fossil Fuel

JEL Classification: O13, Q50

Suggested Citation

Weber, Sylvain and Gerlagh, Reyer and Mathys, Nicole A. and Moran, Daniel D., CO2 Embedded in Trade: Trends and Fossil Fuel Drivers (January 2017). Centro Studi Luca d'Agliano Development Studies Working Paper No. 413. Available at SSRN: https://ssrn.com/abstract=2980899 or http://dx.doi.org/10.2139/ssrn.2980899

Sylvain Weber (Contact Author)

University of Neuchatel - Institute for Research in Economics (IRENE) ( email )

A.-L. Breguet 2
Neuchatel, 2000
Switzerland
+41327181442 (Phone)

HOME PAGE: http://www2.unine.ch/irene/lang/en/collaborateurs/sylvain_weber

Reyer Gerlagh

Tilburg University - Tilburg University School of Economics and Management ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Nicole A. Mathys

Government of the Swiss Confederation - Swiss Federal Office of Energy

Berne
Switzerland

University of Neuchatel

1, A.-L. Breguet
Neuchatel, CH-2000
Switzerland

Daniel D. Moran

Norwegian University of Science and Technology (NTNU) ( email )

Høgskoleringen
Trondheim NO-7491, 7491
Norway

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