Transcript The Carbon Content of Austrian Trade Flows in the European

The Carbon Content of Austrian Trade Flows in the
European and International Trade Context
Birgit Bednar-Friedl, Pablo Munoz Jaramillo,
Thomas Schinko, Karl W. Steininger
Wegener Center for Climate and Global Change and
Department of Economics, University of Graz, Austria
FIW, Vienna, April 8th, 2010
Outline
• Accounting principles in GHG emissions
• Recent and current carbon content of Austrian trade (MRIO)
◦ Mulit-regional Input Output Analysis
◦ Results for 1997 and 2004
• Future development of carbon content in trade (CGE)
◦ Multi-regional Computable General Equilibrium model
◦ Climate policy scenarios
◦ Results
• The economic and carbon effects for Austria
• The economic and carbon effects on a global scale
• Conclusions
The Carbon Content of Austrian Trade
Recent and current carbon content of Austrian trade
Objectives
a)
Estimate consumption based CO2 emissions for Austria for 1997 and 2004
b)
Estimate corresponding carbon balances for exports and imports
c)
Provide insight into carbon leakage
- countries comprising Annex I (developed countries)
- non-Annex I (developing and emerging economies)
The Carbon Content of Austrian Trade
Multi-Regional Input-Ouput Trade Models
Types of models (i.e. sophistication)
- Autonomous trade
assumes imports produced with same technology as used in importing country
- Unidirectional trade
traces commodities back to producing region
but only exporter country´s emissions considered (no emissions embodied
in goods imported from third regions considered)
- Multidirectional trade
considers full feedback loop
The Carbon Content of Austrian Trade
Methodology: Multi-Regional InputOuput Analysis (MRIO)
Russia
Italy
R.o.W
Austria
(AT)
(DE)
(CH)
(RU)
(IT)
(W)
(AT)
Austria
(AT)
Zat,at
Germany
(DE)
China
(CH)
Russia
(RU)
Italy
(IT)
Rest of the World
(W)
Value-Added
(VA)
Total Output
(XX)
Yat,at
(W)
Total
Outputs
China
code
Region\Region
R.O.W.
Germany
Final Demand (F)
Austria
Intermediate Demand (A)
(XX)
XAT
XAT
5
Methodology: Multi-Regional InputOuput Analysis (MRIO)
Russia
Italy
R.o.W
Austria
(AT)
(DE)
(CH)
(RU)
(IT)
(W)
(AT)
Austria
(AT)
Zat,at
Germany
(DE)
China
(CH)
Russia
(RU)
Italy
(IT)
Rest of the World
(W)
Value-Added
(VA)
Total Output
(XX)
(W)
(XX)
Yw,w
XAT
XDE
XCH
XRU
XIT
XW
Yat,at
Zde,de
Zch,ch
Zru,ru
Zit,it
Zw,w
XAT
XDE
XCH
XRU
XIT
Total
Outputs
China
code
Region\Region
R.O.W.
Germany
Final Demand (F)
Austria
Intermediate Demand (A)
XW
6
Methodology: Multi-Regional InputOuput Analysis (MRIO)
Russia
Italy
R.o.W
Austria
(AT)
(DE)
(CH)
(RU)
(IT)
(W)
(AT)
Austria
(AT)
Germany
(DE)
Zat,at
Zde,at
China
(CH)
Russia
(RU)
Italy
(IT)
Rest of the World
(W)
Value-Added
(VA)
Total Output
(XX)
(W)
(XX)
Yw,w
XAT
XDE
XCH
XRU
XIT
XW
Yat,at
Yde,at
Zde,de
Zch,ch
Zru,ru
Zit,it
Zw,w
XAT
XDE
XCH
XRU
XIT
Total
Outputs
China
code
Region\Region
R.O.W.
Germany
Final Demand (F)
Austria
Intermediate Demand (A)
XW
7
Methodology: Multi-Regional InputOuput Analysis (MRIO)
Russia
Italy
R.o.W
Austria
(AT)
(DE)
(CH)
(RU)
(IT)
(W)
(AT)
Austria
(AT)
Germany
(DE)
Zat,at
Zde,at
Zat,de
Zde,de
China
(CH)
Russia
(RU)
Italy
(IT)
Rest of the World
(W)
Value-Added
(VA)
Total Output
(XX)
(W)
(XX)
Yw,w
XAT
XDE
XCH
XRU
XIT
XW
Yat,at
Yde,at
Zch,ch
Zru,ru
Zit,it
Zw,w
XAT
XDE
XCH
XRU
XIT
Total
Outputs
China
code
Region\Region
R.O.W.
Germany
Final Demand (F)
Austria
Intermediate Demand (A)
XW
8
Methodology: Multi-Regional InputOuput Analysis (MRIO)
(CH)
(RU)
Austria
(AT)
Germany
(DE)
China
(CH)
Russia
(RU)
Italy
(IT)
Rest of the World
(W)
Zat,at
Zde,at
Zch,at
Zru,at
Zit,at
Zw,at
Zat,de
Zde,de
Zch,de
Zru,de
Zit,de
Zw,de
Zat,ch
Zde,ch
Zch,ch
Zru,ch
Zit,ch
Zw,ch
Value-Added
(VA)
VAT
VDE
VCH
VRU
VIT
VW
Total Output
(XX)
XAT
XDE
XCH
XRU
XIT
XW
Total
Outputs
(DE)
(IT)
(W)
(AT)
(W)
(XX)
Zat,w
Zde,w
Zch,w
Zru,w
Zit,w
Zw,w
Yat,at
Yde,at
Ych,at
Yru,at
Yit,at
Yw,at
Yat,w
Yde,w
Ych,w
Yru,w
Yit,w
Yw,w
XAT
XDE
XCH
XRU
XIT
XW
Zat,ru Zat,it
Zde,ru Zde,it
Zch,ru Zch,it
Zru,ru Zru,it
Zit,ru Zit,it
Zw,ru Zw,it
R.O.W.
Austria
Russia
(AT)
R.o.W
China
code
Region\Region
Italy
Germany
Final Demand (F)
Austria
Intermediate Demand (A)
9
Data

Data base: Global Trade Analysis Project (GTAP)

GTAP v7 (relates to 2004): 113 regions

GTAP v5 (relates to 1997): 66 regions

57 industries per region

C02 emissions: IEA energy statistics (fuel combustion)
 process emissions (UNFCCC) added in this project
The Carbon Content of Austrian Trade
Results
Categories and Indicators \Year
1997
2004
Domestic Consumption
44,314
47,780
Consumption in products domestically produced
27,695
29,153
Household (direct consumption)
16,619
18,627
Exports
22,943
31,800
20,483
27,558
2,460
4,242
44,366
61,988
Imports coming from Annex I countries
34,343
41,408
Imports coming from Non-Annex I countries
10,023
20,581
Not available
Not available
- 23,884
- 34,430
Consumption-Based Principle (CBP)
88,680
109,768
Production-Based Principle (PBP)
67,257
79,580
Ratio CBP/PBP
1.32
1.38
CO2 Emissions per capita based on PBP (in tons)
8.44
9.74
CO2 Emissions per capita based on CBP (in tons)
11.13
13.42
Exports Domestically produced
Exports of International Transport
Imports (for Austrian Consumption)
Imports of International Transport
Indicators
Net Emission Balance (excluding Int. Transport)
In thousands of tons of CO2.
The Carbon Content of Austrian Trade
-20%
-40%
The Carbon Content of Austrian Trade
Brazil
Canada
India
Indonesia
Argentina
Thailand
China
Poland
Bulgaria
Romania
Czech Republic
Russia
Singapore
Japan
United States
40%
Switzerland
Sweden
France
UK
Austria
Denmark
Belgium
Italy
Ireland
Greece
Spain
Germany
Portugal
Luxembourg
Finland
Netherlands
How do other countries behave concerning
carbon relocation?
100%
80%
60%
38%
20%
0%
-20%
-40%
The Carbon Content of Austrian Trade
Brazil
Canada
India
Indonesia
Argentina
Thailand
China
Poland
Bulgaria
Romania
Czech Republic
Russia
40%
Singapore
Japan
United States
60%
Switzerland
Sweden
France
UK
Austria
Denmark
Belgium
Italy
Ireland
Greece
Spain
Germany
Portugal
Luxembourg
Finland
Netherlands
How do other countries behave concerning
carbon relocation?
100% 99%
80%
69%
42%
39%
38%
20%
0%
40%
20%
-20%
-40%
The Carbon Content of Austrian Trade
Brazil
Canada
India
Indonesia
Argentina
Thailand
China
60%
Poland
Bulgaria
Romania
Czech Republic
Russia
80%
Singapore
Japan
United States
100%
Switzerland
Sweden
France
UK
Austria
Denmark
Belgium
Italy
Ireland
Greece
Spain
Germany
Portugal
Luxembourg
Finland
Netherlands
How do other countries behave concerning
carbon relocation?
99%
69%
42%
39%
38%36%
34%
26%
20% 18%
22%21% 19%
11% 9%
6%
0%
40%
20%
-20%
-40%
42%
39%
38%36%
34%
26%
20% 18%
22%21% 19%
0%
11% 9%
6%
10%
The Carbon Content of Austrian Trade
Brazil
Canada
India
Indonesia
Argentina
Thailand
China
60%
Poland
Bulgaria
Romania
Czech Republic
Russia
80%
Singapore
Japan
United States
100%
Switzerland
Sweden
France
UK
Austria
Denmark
Belgium
Italy
Ireland
Greece
Spain
Germany
Portugal
Luxembourg
Finland
Netherlands
How do other countries behave concerning
carbon relocation?
99%
69%
54%
25%
40%
20%
-20%
-40%
42%
39%
38%36%
34%
26%
20% 18%
22%21% 19%
11% 9%
6%
0%
The Carbon Content of Austrian Trade
Brazil
Canada
India
Indonesia
Argentina
Thailand
China
60%
Poland
Bulgaria
Romania
Czech Republic
Russia
80%
Singapore
Japan
United States
100%
Switzerland
Sweden
France
UK
Austria
Denmark
Belgium
Italy
Ireland
Greece
Spain
Germany
Portugal
Luxembourg
Finland
Netherlands
How do other countries behave concerning
carbon relocation?
99%
69%
54%
25%
10%
-10% -17% -23%
-11% -21%
40%
20%
-20%
-40%
42%
39%
38%36%
34%
26%
20% 18%
22%21% 19%
11% 9%
6%
0%
The Carbon Content of Austrian Trade
-10% -17% -23%
-11% -21%
Brazil
Canada
India
Indonesia
Argentina
Thailand
China
60%
Poland
Bulgaria
Romania
Czech Republic
Russia
80%
Singapore
Japan
United States
100%
Switzerland
Sweden
France
UK
Austria
Denmark
Belgium
Italy
Ireland
Greece
Spain
Germany
Portugal
Luxembourg
Finland
Netherlands
How do other countries behave concerning
carbon relocation?
99%
69%
54%
25%
10%
-7%
-8%
-8%
-22% -23%
-22%
-10%
How do other countries behave concerning
carbon relocation?
16.0
14.0
13.5
13.4
12.0
12.0
10.0
10.0
9.7
8.0
6.7
6.0
9.2
5.9
3.9
4.0
4.34.3
3.0
2.0
Austria Switzerland Sweden
Russia
China
CO2 Emissions per capita based on PBP (in tons)
CO2 Emissions per capita based on CBP (in tons)
The Carbon Content of Austrian Trade
World
The use of different accounting principles…..

…..is of considerable importance when assigning carbon responsibilities:
 In 2004 consumption based indicator 38% larger than the production
based one
 CO2 emissions embodied in imports: double as much as exports
 One third of the emissions embodied in Austrian imports originated in
non-Annex I countries in 2004
 Consumption based accounting suggests that about 3.5 tons of CO2 per
capita need to be added in comparison with production based indicators.
The Carbon Content of Austrian Trade
Simulation of climate policy and
incorporated carbon trade implications
• Use of Production Based Principle only
◦ Effectiveness of climate policy overestimated?
◦ No representation of carbon leakage
• Assess the carbon and economic impact of post-2012
climate policy scenarios for Austria and on a global scale
◦ Output, Consumption, Trade flows, Carbon emissions
◦ Environmental effectiveness of climate policies (carbon leakage)
The Carbon Content of Austrian Trade
The model & data
• Multi-sectoral, multi-regional, Computable General
Equilibrium (CGE) model
◦ Austria/ main trading partners/ world regions (19 regions in total)
◦ 11 sectors: differentiated by energy intensity and whether covered
by EU-ETS
◦ GTAP 7 database 113 countries; 57 commodities; base year 2004
◦ Carbon emissions: unidirectional trade carbon accounting
• Scenario for 2020 (reference)
◦ Capital stock, labor, autonomous energy efficiency increase,
multifactor productivity growth
◦ Considering current economic downturn
The Carbon Content of Austrian Trade
The Model – regional (dis)aggregation
• 19 regions based on
◦ Austria’s main trading partners
◦ Importance to climate policy debate
The Carbon Content of Austrian Trade
The Model – Sectoral (dis)aggregation
The Carbon Content of Austrian Trade
Definition of policy scenarios
The Carbon Content of Austrian Trade
Definition of policy scenarios
The Carbon Content of Austrian Trade
Definition of policy scenarios
The Carbon Content of Austrian Trade
Definition of policy scenarios
The Carbon Content of Austrian Trade
Results – Austrian Output & Trade
Output and Trade effects for Austria relative to 2004 (in %)
35%
30%
ETS sectors
25%
20%
_Output ETS
15%
_Import ETS
_Export ETS
10%
5%
0%
BAU
ETS_EU
NETS_EU
PK_H
IPCC_H
40%
Non-ETS sectors
35%
30%
25%
_Output NETS
20%
_Import NETS
15%
_Export NETS
10%
5%
0%
BAU
The Carbon Content of Austrian Trade
ETS_EU
NETS_EU
PK_H
IPCC_H
Results – Austrian CO2 emissions
Production based (PBP) vs. Consumption
based (CBP) CO2 emissions 2020 (Mt CO2)
120.00
9%
9%
9%
15%
21%
24%
20%
24%
100.00
80.00
60.00
PBP
CBP
40.00
20.00
0.00
2004
BAU
ETS_EU
NETS_EU
EU unilateral
scenarios
The Carbon Content of Austrian Trade
PK_L
PK_H
IPCC_L
IPCC_H
Internationally
coordinated scenarios
for Annex I
Results – on a global scale
•
CO2 emissions should globally decrease from the 2004 level (2 degree objective)
•
In all scenarios but IPCC_H:
by 2020: CO2 emission increases in unregulated regions > CO2 emission reduction efforts
in Annex I regions
Change in CO2 emissions (in Mt CO2) per region and per scenario by 2020 relative to 2004
The Carbon Content of Austrian Trade
Carbon Leakage Rate
Scenario
for 2020
ETS_EU
NETS_EU
PK_L
PK_H
IPCC_L
IPCC_H
Leakage
Rate
58%
54%
28%
27%
22%
21%
Leakage Rate = -
The Carbon Content of Austrian Trade
∆ CO2 non policy regions (relative BAU)
∆ CO2 policy regions (relative BAU)
Conclusions
• Past: Multidirectional model of Austrian trade: CO2 emissions under CBP
are 38% larger than under PBP (2004), a ratio increasing since 1997
• Future: Relatively strong effects of climate policy on energy intensive
industries
• Overestimation of climate policy effectiveness by PBP
• Gap between Austria’s CO2 emissions according to PBP and CBP to
increase for strict and not-comprehensive scenarios
• On a global scale, CO2 emission reductions due to most climate policies
as discussed pre-Copenhagen are more than counterbalanced by
emission increases in non-abating regions
• Carbon Leakage decreases as climate policies become more
comprehensive
• For a future post-2012 climate policy agreement the inclusion of ALL
world regions – though respecting the principle of common but
differentiated responsibilities – is crucial
The Carbon Content of Austrian Trade
Further information…
Full report available at:
www.fiw.ac.at > research studies 2009/2010
Karl Steininger
[email protected]
Thomas Schinko
[email protected]
Wegener Center for Climate and Global Change
University of Graz
Leechgasse 25
A-8010 Graz, Austria
The Carbon Content of Austrian Trade