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Impact of Trade Openness and Sector Trade on Embodied Greenhouse Gases Emissions and Air Pollutants

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  • Islam, Moinul
  • Kanemoto, Keiichiro
  • Managi, Shunsuke

Abstract

The production of goods and services generates greenhouse gases (GHGs) and air pollution both directly and through the activities of the supply chains on which they depend. The analysis of the latter—called embodied emissions—in the cause of internationally traded goods and services is the subject of this paper. We find that trade openness increases embodied emissions in international trade (EET). We also examine the impact of sector trade on EET. By applying a fixed-effect model using large balanced panel data from 187 countries between 1990 and 2011, we determine that each unit of increase in trade openness results in a 10% to 23% increase in GHG embodied emissions (EE). The sector trade effect is also significant for the EE of carbon dioxide (CO2), methane (CH4) nitrous oxide (N2O), carbon monoxide (CO), non-methane volatile organic compounds (NMVOCs), particulates (PM10 ) and sulfur dioxide (SO2). Our findings also clearly indicate that the impact of the GDP on the EE of exports is positive, increasing emissions, but that it is negative on the EE of imports. We suggest that countries monitor trade sector emissions and trade openness to mitigate global embodied GHG emissions and air pollutants.

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  • Islam, Moinul & Kanemoto, Keiichiro & Managi, Shunsuke, 2016. "Impact of Trade Openness and Sector Trade on Embodied Greenhouse Gases Emissions and Air Pollutants," MPRA Paper 69898, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:69898
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    Cited by:

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    2. Zhangqi Zhong & Xu Zhang & Wei Shao, 2019. "Measuring global energy-related sulfur oxides emissions embodied in trade: a multi-regional and multi-sectoral analysis," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 95(1), pages 401-418, January.
    3. Bin Wang & Dechun Huang & Chuanhao Fan & Zhencheng Xing, 2021. "Peak of SO 2 Emissions Embodied in International Trade: Patterns, Drivers and Implications," Sustainability, MDPI, vol. 13(23), pages 1-19, December.
    4. Xiaran Zhang & Xiaoxia Rong & Meng Cai & Qingchun Meng, 2019. "Collaborative Optimization of Emissions and Abatement Costs for Air Pollutants and Greenhouse Gases from the Perspective of Energy Structure: An Empirical Analysis in Tianjin," Sustainability, MDPI, vol. 11(14), pages 1-18, July.
    5. Halkos, George E. & Papageorgiou, George J., 2018. "Pollution, environmental taxes and public debt: A game theory setup," Economic Analysis and Policy, Elsevier, vol. 58(C), pages 111-120.
    6. Alessandro De Matteis, 2019. "Decomposing the anthropogenic causes of climate change," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 21(1), pages 165-179, February.

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    More about this item

    Keywords

    environmental economics; greenhouse gases (GHGs); industrial ecology; input-output analysis; international trade; trade and environment;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F18 - International Economics - - Trade - - - Trade and Environment
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods

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