CO2 Embedded in Trade: Trends and Fossil Fuel Drivers

34 Pages Posted: 28 Mar 2019

See all articles by Sylvain Weber

Sylvain Weber

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

Reyer Gerlagh

Tilburg University - Center and Faculty of Economics and Business Administration

Nicole A. Mathys

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

Daniel D. Moran

Norwegian University of Science and Technology (NTNU)

Multiple version iconThere are 2 versions of this paper

Date Written: 2019

Abstract

The amount of CO2 embedded in trade has substantially increased over the last decades. We study the trends and some drivers of the carbon content of trade over the period 1995-2009. Our main findings are the following. First, the mix of traded goods tends to have higher emission intensity than the average mix of final demand. Second, dirty countries tend to specialize in emission-intensive sectors. This finding suggests that trade liberalization may increase global emissions. Third, the share of goods produced in emission-intensive countries is rising, consequently increasing global emissions. Finally, we find that coal abundance is an important driver of net CO2 exports, and abundance increases exports. These findings highlight the importance of considering trade when designing CO2 reduction strategies. They also suggest that, if left unattended, continued growth in global trade will increase – not decrease – global CO2 emissions.

Keywords: international trade, embodied emissions, carbon leakage, multi-region input-output analysis, fossil fuels, Kyoto Protocol

JEL Classification: F180, Q430, Q540, C670

Suggested Citation

Weber, Sylvain and Gerlagh, Reyer and Mathys, Nicole Andréa and Moran, Daniel D., CO2 Embedded in Trade: Trends and Fossil Fuel Drivers (2019). CESifo Working Paper No. 7562. Available at SSRN: https://ssrn.com/abstract=3361365

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 - Center and Faculty of Economics and Business Administration ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Nicole Andréa Mathys

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

Neuchatel, 2000
Switzerland

Federal Office for Spatial Development ( email )

Daniel D. Moran

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

Trondheim NO-7491
Norway

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