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

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  • de Melo, Jaime
  • Grether, Jean-Marie
  • Mathys, Nicole Andréa

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.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6522.

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Date of creation: Oct 2007
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Handle: RePEc:cpr:ceprdp:6522

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Keywords: decomposition; embodied emissions in trade; Environment; Growth; Trade; transport;

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  1. de Melo, Jaime & Grether, Jean-Marie, 2003. "Globalization and Dirty Industries: Do Pollution Havens Matter?," CEPR Discussion Papers 3932, C.E.P.R. Discussion Papers.
  2. Miketa, Asami & Mulder, Peter, 2005. "Energy productivity across developed and developing countries in 10 manufacturing sectors: Patterns of growth and convergence," Energy Economics, Elsevier, vol. 27(3), pages 429-453, May.
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  5. David I. Stern, 2005. "Reversal in the Trend of Global Anthropogenic Sulfur Emissions," Rensselaer Working Papers in Economics 0504, Rensselaer Polytechnic Institute, Department of Economics.
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  8. Grossman, Gene & Krueger, Alan B, 1992. "Environmental Impacts of a North American Free Trade Agreement," CEPR Discussion Papers 644, C.E.P.R. Discussion Papers.
  9. Grether, Jean-Marie & Mathys, Nicole A. & de Melo, Jaime, 2006. "Unraveling the worldwide pollution haven effect," Policy Research Working Paper Series 4047, The World Bank.
  10. Hettige, Hemamala & Martin, Paul & Singh, Manjula & Wheeler,David R., 1995. "The industrial pollution projection system," Policy Research Working Paper Series 1431, The World Bank.
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Cited by:
  1. Cunha, Barbara & Mani, Muthukumara, 2011. "DR-CAFTA and the environment," Policy Research Working Paper Series 5826, The World Bank.

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