Transcript Folie 1

11. FIW-Workshop Studien zur Außenwirtschaft
Wiener Institut für Internationale Wirtschaftsvergleiche (wiiw)
Wien, 8. April 2010
CO2 Emissions Embodied in Austrian
International Trade
Kurt Kratena, Ina Meyer
Austrian Institute of Economic Research – WIFO
Outlook

Motivation

Empirical findings with respect to CO2 emissions
embodied in international trade

Relevance of CO2 embodied in trade  the concept
of producer-based GHG inventories under UNFCCC
and related problems under unilateral climate
protection regimes

Measuring embodied emissions: Methodologies and our
modelling approach for Austria

Data

Empirical results

Conclusions
MOTIVATION: Empirical findings
w.r.t CO2 emissions embodied in international trade

Peters & Hertwich (2008) calculate that 5.3 Gt of global CO2
emissions are embodied in internationally traded goods  equal
to 21.5% of global CO2 emissions

Nakano et al. (2009) estimate that “trade deficits” of CO2
emissions are to be observed in 21 OECD countries in the early
2000s

Net importer and net exporter are clearly separated by OECD and
non-OECD members

Net importers: USA, Japan, UK, Germany, France, Italy

Net exporters: Russia, China, Indonesia, India, South Africa

Accelateration of global integration via international outsourcing
and fragmentation of production processes has contributed to this
development
MOTIVATION: Production-based GHG emissions inventories
and related problems
BUT

Embodied carbon emissions in imports are not accounted for in the legal
reporting mechanism of the UNFCCC. This scheme follows a territorial
principle, i.e. only emissions produced from domestic sources are taken
into account.

Production-based approach (territorial GHG emissions, including exports)

Due to the lack of accounting for emissions embodied in imports, this
approach can lead to unclear emissions profiles, e.g. emissions per unit of
GDP or per capita of a country if net imports of emissions are significant
(like in OECD countries).

Analyzing and quantifying emissions embodied in international trade give
a more adequate description of countries emissions profiles.

In the literature the consumption-based approach (production approach
– exports + imports) has been developed to account for a countries’
consumption related emissions. However, this approach does not seem
feasible within international treaties due to methodological and data
problems.
Production-based GHG emissions inventories II
30,000
How much growth
in emissions is
triggered by
import demand
from industrialized
countries?
25,000
in Mio. t CO2
20,000
non-Annex I Parties
15,000
10,000
Annex I Parties
5,000
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Q: IEA Database, CO2 emissions from fuel combustion sectoral approach, 2009
Carbon leakage

Climate protection agreements with a limited geographic scope (Kyoto
Protocol) possess an intrinsic incentive to shift carbon intensive production
abroad if based on a production-based approach to emissions
accounting

This is because industries in countries with binding emission reduction
targets have to compete with exports from countries without mandatory
emissions reductions. Due to lower costs involved (through lower carbon
prices because of absent pricing mechanism) there is an incentive to shift
carbon-intensive production abroad  carbon leakage

Carbon leakage could imply a rise in international emission budget, if
production shifts address countries with less carbon efficient installations
and less ambitious environmental legislation

Analyzing CO2 emissions embodied in international trade of industrialized
countries is important to capture relevant underlying drivers and
dynamics
Measuring embodied emissions
Def.: Carbon (emissions) embodied in a product is defined as all the
emissions required to produce the product, including all stages of
the production process from raw material extraction through to
final assembly and ultimately the final sale of the product.
Emissions can be calculated using different methodological
approaches:
Methods to calculate
Embodied emissions
Top-down
Approach
Single Country
Bilateral Trade
Balance
Bottom-up
Approach
Multi-regional
Input-Output
Model
Life-Cyle
Assessment
Single country approach to embodied emissions
in Austrian external trade
 x1   A11
   A
 x2   21
A12   x1   y11

A22   x2   y 21
 x1   Ad
  m
 x2   A
0   x1   f d  ex ex 
   

A22   x2   f m
y22 

y12 
y 22 

1
 x1  
I  Ad
  m
d 1
x
I  A22 1
A
I

A
 2  




1
 em1  
Eˆ1 I  Ad

ˆ m
d 1
em
I  A22 1
E
A
I

A

2

  2


  f d  ex
0

I  A22 1   f m
  f d  ex
0
m
1  
Eˆ 2 I  A22    f
ex 

y22 
ex 

y22 
Single country approach to embodied emissions
in Austrian external trade II

em exp1  Eˆ1 I  Ad

1

ex  Eˆ 2 Am I  Ad
 I  A 
1

1
em imp1  Eˆ 2 I  A22  f m  Eˆ 2 Am I  Ad

em net1  Eˆ 1 I  A d

1
1
ex  Eˆ 2 I  A22  f
m
1
22

ex
 I  A 
1
 Eˆ 2 A m I  A d
1
22
fd
 I  A   f
1
1
22
d
 ex

Data
Main data requirements for single country input-output approach:
1. IO tables
2. Bilateral trade data
3. data on CO2 emissions
IO tables in current prices for 1995, 2000 and 2005
(EUROSTAT)
Trade taken from IO tables covers industries as well as
services in the 2 digit-NACE classification
Data for CO2 emissions by industries in Austria was taken
from energy NAMEA dataset (Stat. Austria) – energy data
according to residential principle for 1999 to 2007 for 2 digitNace industries, differentiating about 30 energy carriers
Application of CO2 emissions factors from UNFCCC on the
NAMEA energy data set (including process emissions)
IO Austrian exports and imports
1995 and 2005 in mill. Euro
1995
20
21
22
23
24
25
26
27
2005
exports
imports
trade
balance
1,554
2,574
582
203
3,375
1,733
1,136
3,190
751
1,296
845
772
4,947
1,816
1,053
2,722
803
1,278
-263
-569
-1,572
-83
83
468
exports
imports
trade
balance
3,056
3,471
1,474
1,039
8,062
3,230
1,877
7,908
1,145
2,046
1,302
4,448
10,098
3,322
1,543
5,928
1,911
1,425
172
-3,409
-2,036
-92
334
1,980
Pulp, Paper
Basic Metals
Data II
 Data for CO2 emissions of industrial sectors in the ROW are
approximated by CO2 emissions of the EU 27 from the IEA
database on energy-related CO2 emissions
Data is converted from the IEA industry classification to the 2
digit NACE classification by using output weights from the EU 27
IO table
CO2 emissions factors thus vary between Austria and EU 27
In particular for electricity generation the CO2 emission factor
is much higher in the EU 27 than in Austria (different processmix between renewable electricity generation, nuclear
generation and different fossil generation technologies)
CO2 emission coefficients
Table : CO 2 emission coefficients (CO2 in kg per unit of € output); 2000, Austria and EU 27
NACE
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
40
Food products and beverages
Tobacco products
Textiles
Wearing apparel; furs
Leather and leather products
Wood and products of wood and cork
Pulp, paper and paper products
Printed matter and recorded media
Coke, refined petroleum products and nuclear fuels
Chemicals, chemical products and man-made fibres
Rubber and plastic products
Other non-metallic mineral products
Basic metals
Fabricated metal products, except machinery and equipment
Machinery and equipment n.e.c.
Office machinery and computers
Electrical machinery and apparatus n.e.c.
Radio, television and communication equipment and apparatus
Medical, precision and optical instruments, watches and clocks
Motor vehicles, trailers and semi-trailers
Other transport equipment
Furniture; other manufactured goods n.e.c.
Secondary raw materials
Electrical energy, gas, steam and hot water
EU 27
0.085
0.266
0.078
0.078
0.083
0.098
0.502
0.012
1.393
0.145
0.234
0.690
1.260
0.046
0.039
0.027
0.033
0.033
0.032
0.026
0.020
0.246
0.242
3.782
Austria
0.088
0.024
0.070
0.013
0.033
0.052
0.452
0.009
1.315
0.237
0.028
0.882
1.505
0.031
0.017
0.002
0.015
0.012
0.008
0.015
0.011
0.018
0.019
1.154
Empirical Results
CO2 emissions embodied in trade flows (in 1,000 tons)
CO2 in imports
CO2 in exports
CO2 trade balance
in % of CO2 in production
in % of total CO2
1995
2000
2005
47,638
55,725
71,764
36,666
-10,972
-24
47,138
-8,587
-18
65,428
-6,336
-11
-17
-13
-8
CO2 emissions, embodied in exports and imports
(in 1,000 tons), 1995 and 2005
1995
NACE
exports
imports
balance
221
331
-110
2005
imports
exports
613
581
balance
15
Food products and beverages
32
16
Tobacco products
2
10
-8
12
97
-85
17
Textiles
330
409
-79
246
362
-115
18
Wearing apparel; furs
33
258
-225
125
561
-436
-65
19
Leather and leather products
73
174
-100
89
154
20
Wood and products of wood and cork
306
308
-2
550
490
60
21
Pulp, paper and paper products
2,949
2,158
791
3,453
2,743
710
22
Printed matter and recorded media
26
37
-11
67
72
-5
23
Coke, refined petroleum products and nuclear fuels
1,932
3,273
-1,341
6,208
11,231
-5,023
24
Chemicals, chemical products and man-made fibres
1,750
1,777
-27
3,293
3,305
-12
25
Rubber and plastic products
1,159
2,738
-1,580
1,036
1,797
-761
26
Other non-metallic mineral products
1,808
1,510
298
3,175
2,447
728
27
Basic metals
12,987
11,569
1,418
18,912
14,377
4,535
28
Fabricated metal products, except machinery and equipment
366
515
-148
467
556
-89
29
Machinery and equipment n.e.c.
364
634
-269
542
648
-106
30
Office machinery and computers
223
780
-557
285
646
-362
31
Electrical machinery and apparatus n.e.c.
169
275
-106
294
373
-79
32
Radio, television and communication equipment and apparatus
166
276
-110
238
351
-113
33
Medical, precision and optical instruments, watches and clocks
68
205
-137
94
182
-88
34
Motor vehicles, trailers and semi-trailers
682
1,055
-373
405
452
-48
35
Other transport equipment
50
130
-80
52
56
-5
36
Furniture; other manufactured goods n.e.c.
191
1,310
-1,119
415
1,171
-756
37
Secondary raw materials
40
Electrical energy, gas, steam and hot water
171
358
-186
426
660
-234
5,920
10,287
-4,366
12,569
16,192
-3,623
Conclusions

Austria shows large net imports of CO2, i.e. between 8%
(2005) and 17% (1995) of total CO2 emissions

One important result is that these net imports have
decreased considerably


partly due to decreases of imported CO2 emissions

and of huge increases of exported CO2 emissions

especially the basic metal industry has increased net
exports and the electric sector has decreased its net
imports

large increase in exports of CO2 goes together with the
high growth in world trade in this period
The Austrian decline in trade deficit of embodied emissions
stands in contrast to developments calculated for other
countries, e.g. USA, Germany, Italy, UK and Japan where
trade balance deficits of embodied emissions grew
substantially