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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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Author Info
Jean-Marie Grether (University of Neuchâtel)
Nicole A. Mathys (University of Lausanne and EPFL)
Jaime de Melo (University of Geneva and CEPR)

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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 the same magnitude. 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 Fondazione Eni Enrico Mattei in its series Working Papers with number 2007.93.

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Date of creation: Oct 2007
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Handle: RePEc:fem:femwpa:2007.93

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Related research
Keywords: Trade; Growth; Environment; Decomposition; Embodied Emissions in Trade; Transport;

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Find related papers by JEL classification:
F11 - International Economics - - Trade - - - Neoclassical Models of Trade
Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounting

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  1. Arik Levinson, 2007. "Technology, International Trade, and Pollution from U.S. Manufacturing," NBER Working Papers 13616, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  2. Werner Antweiler & Brian R. Copeland & M. Scott Taylor, 2001. "Is Free Trade Good for the Environment?," American Economic Review, American Economic Association, vol. 91(4), pages 877-908, September. [Downloadable!] (restricted)
    Other versions:
  3. 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. [Downloadable!]
  4. Jean-Marie GRETHER & Nicole A. MATHYS & Jaime DE MELO, 2006. "Unraveling the World-Wide Pollution Haven Effect," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 06.04, Université de Lausanne, Faculté des HEC, DEEP. [Downloadable!]
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  5. Carrere, Celine & Schiff, Maurice, 2004. "On the geography of trade : distance is alive and well," Policy Research Working Paper Series 3206, The World Bank. [Downloadable!]
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  6. Cole, Matthew A. & Elliott, Robert J. R., 2003. "Determining the trade-environment composition effect: the role of capital, labor and environmental regulations," Journal of Environmental Economics and Management, Elsevier, vol. 46(3), pages 363-383, November. [Downloadable!] (restricted)
  7. Jeffrey A. Frankel & Andrew K. Rose, 2005. "Is Trade Good or Bad for the Environment? Sorting Out the Causality," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 85-91, October. [Downloadable!] (restricted)
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  8. 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. [Downloadable!] (restricted)
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  9. Hettige, Hemamala & Martin, Paul & Singh, Manjula & Wheeler,David R., 1995. "The industrial pollution projection system," Policy Research Working Paper Series 1431, The World Bank. [Downloadable!]
  10. 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. [Downloadable!] (restricted)
  11. Gene M. Grossman & Alan B. Krueger, 1991. "Environmental Impacts of a North American Free Trade Agreement," NBER Working Papers 3914, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  12. Antweiler, Werner, 1996. "The Pollution Terms of Trade," Economic Systems Research, Taylor and Francis Journals, vol. 8(4), pages 361-65, December.
  13. Stern, David I., 2002. "Explaining changes in global sulfur emissions: an econometric decomposition approach," Ecological Economics, Elsevier, vol. 42(1-2), pages 201-220, August. [Downloadable!] (restricted)
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