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CO2 embedded in trade: trends and fossil fuel drivers

Sylvain Weber (), Reyer Gerlagh, Nicole Mathys and Daniel Moran

No 7562, CESifo Working Paper Series from CESifo Group Munich

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 (search for similar items in EconPapers)
JEL-codes: F18 Q43 Q54 C67 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene, nep-env and nep-int
Date: 2019
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Working Paper: CO2 embedded in trade: trends and fossil fuel drivers (2017) Downloads
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