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

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

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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  1. Arik Levinson, 2008. "Technology, International Trade, and Pollution from U.S. Manufacturing," NCEE Working Paper Series 200802, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Feb 2008.
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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.
  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.
  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.
  11. 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.
  12. 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.
  13. Werner Antweiler & Brian R. Copeland & M. Scott Taylor, 1998. "Is Free Trade Good for the Environment?," NBER Working Papers 6707, National Bureau of Economic Research, Inc.
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