A new research paper looking at the role of trade, technique and composition effects on the fall in world-wide SO2 emissions between 1990 and 2000.
The key is the role of technological advances being sufficient to offset the scale effect from China and other rapidly growing countries.
"Trade, Technique and Composition Effects: What is Behind the Fall in World-Wide SO2 Emissions 1990-2000?"
FEEM Working Paper No. 93.2007
Contact: JEAN-MARIE GRETHER
University of Neuchatel - Institute for Economic
and Regional Research (IRER)
Co-Author: NICOLE A. MATHYS
University of Lausanne
Co-Author: JAIME DE MELO
University of Geneva - Department of Political
Economics, Centre for Economic Policy Research
(CEPR), World Bank
Full Text: http://ssrn.com/abstract=1018444
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.