The emission content of The emission content of the trade in value - - PowerPoint PPT Presentation

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The emission content of The emission content of the trade in value - - PowerPoint PPT Presentation

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This project is funded by the European Commission, Research Directorate General as part of the 7th Framework Programme, Theme 8: Socio-Economic Sciences and Humanities. Grant Agreement no: 225 281 The emission content of The emission content of

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This project is funded by the European Commission, Research Directorate General as part

  • f the 7th Framework Programme, Theme 8: Socio-Economic Sciences and Humanities.

Grant Agreement no: 225 281

The emission content of The emission content of the trade in value added Erik Dietzenbacher Erik Dietzenbacher

(University of Groningen)

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Introduction Introduction

Starting point: pollution haven hypothesis Starting point: pollution haven hypothesis rich countries export “clean” products and import “dirty” products and import dirty products In input output studies: In input-output studies: emission intensity of the export bundle i i i t it f th i t b dl versus emission intensity of the import bundle U i d ti i i i t iti Using domestic emission intensities i.e. emissions per unit of gross output

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Introduction Introduction

Using domestic emission intensities Using domestic emission intensities also for the imports: displaced pollution (Levinson 2009) displaced pollution (Levinson, 2009) Bilateral comparison of average emission intensities: Bilateral comparison of average emission intensities: for example US and India US i t it f t b dl <

  • average US intensity of export bundle <

average US intensity of import bundle I di i t it f t b dl

  • average Indian intensity of export bundle >

average Indian intensity of import bundle

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Introduction Introduction

In this study: In this study:

  • bilateral comparisons (possible for WIOTs)
  • not export/imports bundles
  • not export/imports bundles

but emissions in exports (measured as embodied production in foreign final demands) production in foreign final demands) and emissions in imports (measured as embodied foreign production in domestic final demands) foreign production in domestic final demands)

  • consider emissions per unit of value added
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Exercise 1 Exercise 1

Intermediate deliveries Final demands US India RoW US India RoW Output US India RoW Val Add Output CO2 emis

Example for US, India, RoW

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Exercise 1 Exercise 1

Intermediate deliveries Final demands US India RoW US India RoW Output US India RoW Val Add Output CO2 emis

Example for US, India, RoW

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Exercise 1 Exercise 1

Intermediate deliveries Final demands US India RoW US India RoW Output US India RoW Val Add Output CO2 emis

Example for US, India, RoW

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Exercise 1 Exercise 1

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Exercise 1 Exercise 1

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Exercise 1 Exercise 1

Intermediate deliveries Final demands US India RoW US India RoW Output US India RoW Val Add Output CO2 emis

Example for US, India, RoW

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Exercise 1 Exercise 1

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Exercise 1 Exercise 1

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Exercise 2 Exercise 2

Intermediate deliveries Final demands US India RoW US India RoW Output US India RoW Val Add Output CO2 emis

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Exercise 2 Exercise 2

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Exercise 2 Exercise 2

Why? Why?

  • Link with global value chains, trade in value added

g ,

  • Large part of the (non IO) literature uses emission-to-

value-added (EMVA) ratios

  • Adaptation of the pollution haven hypothesis:
  • Adaptation of the pollution haven hypothesis:

rich countries displace polluting activities but less if they generate y g much domestic value added

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Emission intensities (emission to output ratios)

L U X D N K I R L N L D U S A A U T A U S F I N S W E B E L F R A D E U J P N C A N I T A G B R E S P G R C C Y P S V N P R T M L T C Z E K O R T W N S V K E S T H U N L V A P O L L T U T U R R U S B R A M E X R O M B G R C H N I D N I N D R O W LUX DNK IRL NLD USA USA AUT AUS FIN SWE BEL FRA DEU JPN CAN ITA GBR ESP GRC CYP SVN SVN PRT MLT CZE KOR TWN SVK EST HUN LVA POL LTU TUR RUS BRA MEX ROM BGR CHN IDN IND ROW

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Emission to value added ratios

L U X D N K I R L N L D U S A A U T A U S F I N S W E B E L F R A D E U J P N C A N I T A G B R E S P G R C C Y P S V N P R T M L T C Z E K O R T W N S V K E S T H U N L V A P O L L T U T U R R U S B R A M E X R O M B G R C H N I D N I N D R O W LUX DNK IRL NLD USA USA AUT AUS FIN SWE BEL FRA DEU JPN CAN ITA GBR ESP GRC CYP SVN SVN PRT MLT CZE KOR TWN SVK EST HUN LVA POL LTU TUR RUS BRA MEX ROM BGR CHN IDN IND ROW

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Results Results

Not much difference so, focus on emission to value added ratios ,

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Emission to value added ratios

L U X D N K I R L N L D U S A A U T A U S F I N S W E B E L F R A D E U J P N C A N I T A G B R E S P G R C C Y P S V N P R T M L T C Z E K O R T W N S V K E S T H U N L V A P O L L T U T U R R U S B R A M E X R O M B G R C H N I D N I N D R O W LUX DNK IRL NLD USA

Rich

USA AUT AUS FIN SWE BEL FRA DEU JPN CAN ITA GBR ESP GRC CYP SVN SVN PRT MLT CZE KOR TWN SVK EST HUN LVA POL LTU TUR RUS BRA MEX ROM BGR CHN IDN IND ROW

Poor

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Emission to value added ratios

L U X D N K I R L N L D U S A A U T A U S F I N S W E B E L F R A D E U J P N C A N I T A G B R E S P G R C C Y P S V N P R T M L T C Z E K O R T W N S V K E S T H U N L V A P O L L T U T U R R U S B R A M E X R O M B G R C H N I D N I N D R O W LUX DNK IRL NLD USA

Rich Average Australian emission to value added ratios

USA AUT AUS FIN SWE BEL FRA DEU JPN CAN ITA GBR ESP GRC CYP SVN SVN PRT MLT CZE KOR TWN SVK EST HUN LVA POL LTU TUR RUS BRA MEX ROM BGR CHN IDN IND ROW

Poor

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Emission to value added ratios

L U X D N K I R L N L D U S A A U T A U S F I N S W E B E L F R A D E U J P N C A N I T A G B R E S P G R C C Y P S V N P R T M L T C Z E K O R T W N S V K E S T H U N L V A P O L L T U T U R R U S B R A M E X R O M B G R C H N I D N I N D R O W LUX DNK IRL NLD USA

Rich Average Australian emission to value added ratios

USA AUT AUS FIN SWE BEL FRA DEU

Turkey (poor): Australian EMVA ratio

JPN CAN ITA GBR ESP GRC CYP SVN

exports < imports OK according to PHH = green

SVN PRT MLT CZE KOR TWN SVK EST HUN LVA POL LTU TUR RUS BRA MEX ROM BGR CHN IDN IND ROW

Poor

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Emission to value added ratios

L U X D N K I R L N L D U S A A U T A U S F I N S W E B E L F R A D E U J P N C A N I T A G B R E S P G R C C Y P S V N P R T M L T C Z E K O R T W N S V K E S T H U N L V A P O L L T U T U R R U S B R A M E X R O M B G R C H N I D N I N D R O W LUX DNK IRL NLD USA

Rich Average Australian emission to value added ratios

USA AUT AUS FIN SWE BEL FRA DEU

Turkey (poor): Australian EMVA ratio Mexico (poor): Australian EMVA ratio

JPN CAN ITA GBR ESP GRC CYP SVN

exports < imports OK according to PHH = green exports > imports not OK against PHH = red

SVN PRT MLT CZE KOR TWN SVK EST HUN LVA POL LTU TUR RUS BRA MEX ROM BGR CHN IDN IND ROW

Poor

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Emission to value added ratios

L U X D N K I R L N L D U S A A U T A U S F I N S W E B E L F R A D E U J P N C A N I T A G B R E S P G R C C Y P S V N P R T M L T C Z E K O R T W N S V K E S T H U N L V A P O L L T U T U R R U S B R A M E X R O M B G R C H N I D N I N D R O W LUX DNK IRL NLD USA

Rich Average Australian emission to value added ratios

USA AUT AUS FIN SWE BEL FRA DEU

Turkey (poor): Australian EMVA ratio Mexico (poor): Australian EMVA ratio USA (rich): Australian EMVA ratio Denmark (rich): Australian EMVA ratio

JPN CAN ITA GBR ESP GRC CYP SVN

exports < imports OK according to PHH = green exports > imports not OK against PHH = red exports > imports OK according to PHH = green exports < imports not OK against PHH = red

SVN PRT MLT CZE KOR TWN SVK EST HUN LVA POL LTU TUR RUS BRA MEX ROM BGR CHN IDN IND ROW

Poor

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Emission to value added ratios

L U X D N K I R L N L D U S A A U T A U S F I N S W E B E L F R A D E U J P N C A N I T A G B R E S P G R C C Y P S V N P R T M L T C Z E K O R T W N S V K E S T H U N L V A P O L L T U T U R R U S B R A M E X R O M B G R C H N I D N I N D R O W LUX DNK IRL NLD USA

Rich Average Australian emission to value added ratios

USA AUT AUS FIN SWE BEL FRA DEU

Turkey (poor): Australian EMVA ratio Mexico (poor): Australian EMVA ratio USA (rich): Australian EMVA ratio Denmark (rich): Australian EMVA ratio

JPN CAN ITA GBR ESP GRC CYP SVN

exports < imports OK according to PHH = green exports > imports not OK against PHH = red exports > imports OK according to PHH = green exports < imports not OK against PHH = red

SVN PRT MLT CZE KOR TWN SVK EST

Green = good, red = wrong According to PHH predictions

HUN LVA POL LTU TUR RUS BRA

g p

MEX ROM BGR CHN IDN IND ROW

Poor

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Emission to value added ratios Expectation: N h E

L U X D N K I R L N L D U S A A U T A U S F I N S W E B E L F R A D E U J P N C A N I T A G B R E S P G R C C Y P S V N P R T M L T C Z E K O R T W N S V K E S T H U N L V A P O L L T U T U R R U S B R A M E X R O M B G R C H N I D N I N D R O W LUX DNK IRL NLD USA

Rich North East = green

USA AUT AUS FIN SWE BEL FRA DEU JPN CAN ITA GBR ESP GRC CYP SVN SVN PRT MLT CZE KOR TWN SVK EST HUN LVA POL LTU TUR RUS BRA MEX ROM BGR CHN IDN IND ROW

Poor Expectation: South West = green

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Emission to value added ratios Expectation: N h E

L U X D N K I R L N L D U S A A U T A U S F I N S W E B E L F R A D E U J P N C A N I T A G B R E S P G R C C Y P S V N P R T M L T C Z E K O R T W N S V K E S T H U N L V A P O L L T U T U R R U S B R A M E X R O M B G R C H N I D N I N D R O W LUX DNK IRL NLD USA

Rich North East = green

USA AUT AUS FIN SWE BEL FRA DEU JPN CAN ITA GBR ESP GRC CYP SVN

This version of the pollution haven hypothesis

SVN PRT MLT CZE KOR TWN SVK EST

is not uniformly accepted (937/1640 = 57%)

HUN LVA POL LTU TUR RUS BRA MEX ROM BGR CHN IDN IND ROW

Poor Expectation: South West = green

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Emission to value added ratios

L U X D N K I R L N L D U S A A U T A U S F I N S W E B E L F R A D E U J P N C A N I T A G B R E S P G R C C Y P S V N P R T M L T C Z E K O R T W N S V K E S T H U N L V A P O L L T U T U R R U S B R A M E X R O M B G R C H N I D N I N D R O W IRL USA GBR MEX CHN CHN IDN

Right of the main diagonal: green Left of the main diagonal: red Left of the main diagonal: red IRL, USA, GBR, MEX, CHN, IDN EMVA ratio of exported value added < p EMVA ratio of imported value added

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Emission to value added ratios

L U X D N K I R L N L D U S A A U T A U S F I N S W E B E L F R A D E U J P N C A N I T A G B R E S P G R C C Y P S V N P R T M L T C Z E K O R T W N S V K E S T H U N L V A P O L L T U T U R R U S B R A M E X R O M B G R C H N I D N I N D R O W ESP GRC PRT TUR RUS RUS BGR

Right of the main diagonal: red Left of the main diagonal: green Left of the main diagonal: green ESP, GRC, PRT, TUR, RUS, BGR EMVA ratio of exported value added > p EMVA ratio of imported value added

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Results Results

So far, pollution and displaced pollution What about global emissions?

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G B C H

UK emissions in exported value added GBR → CHN l th

B R H N GBR CHN

less than Displaced UK emissions in imported value added GBR ← CHN t d ith Chi d UK i i trade with China decreases UK emissions CHN emissions in exported value added CHN → GBR less than Displaced CHN emissions in imported value added CHN ← GBR trade with GBR decreases CHN emissions Hence current GBR – CHN trade pattern is good for global emissions! emissions!

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A U M E

The opposite holds

U S E X AUS MEX

Hence current AUS – MEX trade pattern is bad for global emissions!

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G B C H G C B R H N GBR CHN

Good: becomes blue

B R H N GBR CHN A U S M E X AUS A U S M E X AUS

Bad: becomes purple

AUS MEX AUS MEX

Beneficial for emissions in one country but not in the other: no color no color

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L U D N I R N L U S A U A U F I S W B E F R D E J C A I T G B E S G R C Y S V P R M L C Z K O T W S V E S H U L V P O L T T U R U B R M E R O B G C H I D I N R O U X N K R L L D S A U T U S I N W E E L R A E U PN A N T A B R S P R C Y P V N R T L T Z E O R W N V K S T U N V A O L T U U R U S R A E X O M G R H N D N N D O W LUX DNK IRL NLD USA AUT AUS FIN SWE BEL FRA DEU JPN CAN ITA GBR ESP GRC CYP SVN PRT MLT CZE KOR TWN SVK EST HUN LVA POL LTU TUR RUS BRA MEX MEX ROM BGR CHN IDN IND ROW

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L U D N I R N L U S A U A U F I S W B E F R D E J C A I T G B E S G R C Y S V P R M L C Z K O T W S V E S H U L V P O L T T U R U B R M E R O B G C H I D I N R O U X N K R L L D S A U T U S I N W E E L R A E U PN A N T A B R S P R C Y P V N R T L T Z E O R W N V K S T U N V A O L T U U R U S R A E X O M G R H N D N N D O W LUX DNK IRL NLD USA AUT AUS FIN SWE BEL FRA DEU JPN

162/820 = 20% beneficial 94/820 = 11% detrimental

CAN ITA GBR ESP GRC CYP SVN PRT MLT CZE KOR TWN SVK EST HUN LVA POL LTU TUR RUS BRA MEX MEX ROM BGR CHN IDN IND ROW

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L D I N U A A F S B F D J C I G E G C S P M C K T S E H L P L T R B M R B C I I R U X N K R L L D S A U T U S I N W E E L R A E U J PN A N T A B R S P R C Y P V N R T L T Z E O R W N V K S T U N V A O L T U U R U S R A E X O M G R H N D N N D O W IRL AUT AUS CYP ROM ROM CHN IDN ROW

Beneficial for both trading partners IRL, AUT, AUS, CYP, ROM, CHN, IDN, ROW

L U X D N K I R L N L D U S A A U T A U S F I N S W E B E L F R A D E U J PN C A N I T A G B R E S P G R C C Y P S V N P R T M L T C Z E K O R T W N S V K E S T H U N L V A P O L L T U T U R R U S B R A M E X R O M B G R C H N I D N I N D R O W LUX MLT LVA

Detrimental for both trading partners LUX, MLT, LVA

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Th k f tt ti ! Thank you for your attention !

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