NBER WORKING PAPER SERIES

TRADE AND THE GREENHOUSE GAS EMISSIONS FROM INTERNATIONALFREIGHT TRANSPORT

Anca D. CristeaDavid HummelsLaura Puzzello

Misak G. Avetisyan

Working Paper 17117http://www.nber.org/papers/w17117

NATIONAL BUREAU OF ECONOMIC RESEARCH1050 Massachusetts Avenue

Cambridge, MA 02138June 2011

We thank the OECD for funding, Ron Steenblik for suggesting and encouraging the work. We alsothank Bruce Blonigen, Tim Cason, Lata Gangadharan, Tom Hertel, Pete Minor, Paul Raschky, ChristisTombazos, Terrie Walmsley, and seminar participants at the ASSA meetings 2011, and the InternationalWorkshop on Current Issues in CGE Analysis for suggestions and help. The views expressed hereinare those of the authors and do not necessarily reflect the views of the National Bureau of EconomicResearch.

NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies officialNBER publications.

© 2011 by Anca D. Cristea, David Hummels, Laura Puzzello, and Misak G. Avetisyan. All rightsreserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permissionprovided that full credit, including © notice, is given to the source.

Trade and the Greenhouse Gas Emissions from International Freight TransportAnca D. Cristea, David Hummels, Laura Puzzello, and Misak G. AvetisyanNBER Working Paper No. 17117June 2011JEL No. F17,F18,Q56

ABSTRACT

We collect extensive data on worldwide trade by transportation mode and use this to provide detailedcomparisons of the greenhouse gas emissions associated with output versus international transportationof traded goods. International transport is responsible for 33 percent of world-wide trade-related emissions,and over 75 percent of emissions for major manufacturing categories like machinery, electronics andtransport equipment. US exports intensively make use of air cargo; as a result two-thirds of its export-relatedemissions are due to international transport, and US exports by themselves generate a third of transportemissions worldwide. Inclusion of transport dramatically changes the ranking of countries by emissionintensity. US production emissions per dollar of exports are 16 percent below the world average, butonce we include transport US emissions per dollar exported are 59 percent above the world average.We use our data to systematically investigate whether trade inclusive of transport can lower emissions.In one-quarter of cases, the difference in output emissions is more than enough to compensate forthe emissions cost of transport. Finally, we examine how likely patterns of trade growth will affectmodal use and emissions. Full liberalization of tariffs and GDP growth concentrated in China andIndia lead to transport emissions growing much faster than the value of trade, due to trade shiftingtoward distant trading partners. Emissions growth from growing GDP dwarfs any growth from tariffliberalization.

Anca D. CristeaUniversity of Oregoncristea@uoregon.edu

David HummelsKrannert School of Management403 West State StreetPurdue UniversityWest Lafayette, IN 47907-1310and NBERhummelsd@purdue.edu

Laura PuzzelloMonash Universitylaura.puzzello@monash.edu

Misak G. AvetisyanPurdue University425 W State Str, KCTR 237West Lafayette, IN 47907-2056mavetisy@purdue.edu

  1

TradeandtheGreenhouseGasEmissionsfrom

InternationalFreightTransport

AncaCristea,UniversityofOregonDavidHummels,PurdueUniversityandNBER

LauraPuzzello,MonashUniversityMisakAvetisyan,UniversityofSouthernCalifornia

May2011

Abstract:Wecollectextensivedataonworldwidetradebytransportationmodeandusethistoprovidedetailedcomparisonsofthegreenhousegasemissionsassociatedwithoutputversusinternationaltransportationoftradedgoods.Internationaltransportisresponsiblefor33percentofworld‐widetrade‐relatedemissions,andover75percentofemissionsformajormanufacturingcategorieslikemachinery,electronicsandtransportequipment.USexportsintensivelymakeuseofaircargo;asaresulttwo‐thirdsofitsexport‐relatedemissionsareduetointernationaltransport,andUSexportsbythemselvesgenerateathirdoftransportemissionsworldwide.Inclusionoftransportdramaticallychangestherankingofcountriesbyemissionintensity.USproductionemissionsperdollarofexportsare16percentbelowtheworldaverage,butonceweincludetransportUSemissionsperdollarexportedare59percentabovetheworldaverage.Weuseourdatatosystematicallyinvestigatewhethertradeinclusiveoftransportcanloweremissions.Inone‐quarterofcases,thedifferenceinoutputemissionsismorethanenoughtocompensatefortheemissionscostoftransport.Finally,weexaminehowlikelypatternsoftradegrowthwillaffectmodaluseandemissions.FullliberalizationoftariffsandGDPgrowthconcentratedinChinaandIndialeadtotransportemissionsgrowingmuchfasterthanthevalueoftrade,duetotradeshiftingtowarddistanttradingpartners.EmissionsgrowthfromgrowingGDPdwarfsanygrowthfromtariffliberalization.

JELclassification:Q56;F18.Keywords:Greenhousegasemissions;internationaltransportemissions;worldtradegrowth;internationaltradebytransportmodeAcknowledgements:WethanktheOECDforfunding,RonSteenblikforsuggestingandencouragingthework.WealsothankBruceBlonigen,TimCason,LataGangadharan,TomHertel,PeteMinor,PaulRaschky,ChristisTombazos,TerrieWalmsley,andseminarparticipantsattheASSAmeetings2011,andtheInternationalWorkshoponCurrentIssuesinCGEAnalysisforsuggestionsandhelp.

E‐mailaddresses:cristea@uoregon.edu(A.Cristea);hummelsd@purdue.edu(D.Hummels);laura.puzzello@monash.edu(L.Puzzello);mavetisy@purdue.edu(M.Avetisyan).

I. Introduction

Internationaltradegeneratesgreenhousegas(GHG)emissionsfromtwosources:theproductionof

tradedgoods,andtheirtransportationbetweentradingpartners.Alargeliteraturehasfocusedon

  2

theemissionsassociatedwithproduction,examiningquestionsrelatedtohowtrademayreallocate

productionbetweencountrieswithdifferingemissionintensities,orundermineeffortstocontrol

emissionsvia“carbonleakage”.1However,theemissionsassociatedwithinternational

transportationarelargelyoverlooked,bothinthetextofexistingagreementssuchastheKyoto

Protocolregulations,andindatacollectionefforts.2

EffortstomeasurethecontributionofinternationalfreighttransporttoGHGemissionshave

beenlimitedinscope.Thecasestudybasedlifecycleanalyses(LCA)literaturetypicallyfocuseson

aparticularproductandgeographicmarket,andassessestheenvironmentalimpactofeveryinput

intheproductionanddeliveryofthatproduct.Forexample,Simetal.(2007)estimatethatthe

globalwarmingimpactofKenyanandGuatemalanbeansshippedtotheUKare20‐26timeslarger

thanUKproduction.Incontrast,Williams(2007)findsthatcutrosesairdeliveredfromKenyato

theUKgenerateemissionsthataresignificantlylowerthanrosessourcedfromtheneighboring

Netherlands(Williams,2007).WhileLCAstudiesprovidedetailedcalculationsoftransport

emissionsforaparticularproductandtradeflow,theyarenotinformativefortheworldtrading

systemasawhole.3Moregenerally,welackdatasourcesthatattributeinternationaltransport

emissionstooriginanddestinationcountries.Asaconsequence,thereislittlesystematic

informationregardingthemagnitudeoftransportationemissionsrelativetoproduction,andhow

theyaredistributedacrosstradeflows.

                                                            1ExamplesincludeEderingtonandMinier(2003),Babiker(2005),Levinson(2009),LevinsonandTaylor(2008)amongothers.SeealsoCopelandandTaylor(2004)foracomprehensiveliteraturesurvey. 2vanVeen‐GrootandNijkamp(1999)arguethatthekeyresearchfocusinadvancingtheinvestigationontheenvironmentaleffectsofinternationaltradeshouldbeon“buildingupamonitoringsystemanddatabase”tofacilitate“measuringtheenvironmentaleffectsofinternationaltransport”.ForadiscussionofthechallengesinmeasurementandtheomissionofinternationaltransportfrompolicyprotocolsseeOlivierandPeters(1999),MiljøstyrelsenMiljøministeriet(2003)–theDanishEnvironmentalProtectionAgency,DanishMinistryfortheEnvironment,aswellastheTransportationResearchBoard,2009. 3 Afewrecentpapersemployinput‐outputtablestomeasureinternationaltradeemissions,andattempttoincorporateinternationaltransportemissionsintothecalculation(Gretheretal.,2010;PetersandHertwich,2008;Cadarsoetal.,2010).However,dataonthemodesoftransportbywhichgoodstravelisnotreadilyavailableataglobalscale,sothesepaperseitherrestricttheirattentiontoasingleimportingcountryortheybasetheircalculationsonentirelyimputeddata. 

  3

Howimportantareinternationaltransportemissionsrelativetoemissionsfromtheoutput

oftradedgoods?TheInternationalTransportForum(ITF2010)providesaggregatetransport

emissionsdataforinternationalaviationandmaritimetransportbycombiningdataonfuel

consumptionfromtheInternationalEnergyAgency(IEA2010),alongwithinformationonGHG

emissionsbyfueltype.Table1providestheITFestimatesalongwithadditionalcalculationsbythe

authors.From1990‐2004,internationaltransportemissionsroseslightlyfasterthantotal

emissionsoremissionsfromalltransport.Focusingon2004,internationalmaritimeplus

internationalaviationtransportationwasresponsibleforjust3.5percentoftotalemissions.This

seemssmall,buttotalemissionsincludemanyactivities(e.g.,residentialenergyusage,domestic

transportation),whicharenotdirectlyrelatedtotradeortheoutputoftradablegoods.TheIEA

estimatesthatindustrialproductionrepresentsonlyafifthofworldwideemissions,andmost

industrialoutputemissionsareunrelatedtotrade–e.g.,ifaquarterofsteeloutputistradedthen

threequartersoftheoutputemissionsfromsteelcorrespondtodomesticconsumption.This

suggeststhatinternationaltransportmeasuredasashareoftrade‐relatedemissions(whichwe

defineasemissionsgeneratedbytheproductionandtransportofexportedgoods)couldbe

substantial,butcarefulmeasurementisneeded.

BymeasuringactualfuelusetheITF“top‐down”approachisanaccuratewaytoassess

worldwideaviationandmaritimeemissionsinaparticularyear.However,theITFapproachhas

twokeydrawbacks.First,roadandrailtransportrepresentasignificantfractionofinternational

tradeforland‐adjacentpartnersbuttheiremissionsareomittedfromtheITFnumbersbecause

internationalanddomesticfuelusageisindistinguishable.Thisisespeciallyproblematicbecause

roadandrailtransportisarisingshareofworldtradeasregionaltradeliberalization,especiallyin

NorthAmericaandEurope,concentratedtradegrowthbetweenpartnercountriessharingland

borders.RoadandrailgrowthisomittedfromITFemissionnumbers,whichraisesthequestionof

whetherthesharpdeclineinemissionsperdollaroftradeshowninTable1isrealorspurious.

  4

TheseconddrawbackisthatonecannotusetheaggregateITFnumberstoassesswhereorhow

maritimeoraviationfuelwasused.Evenifoneweretotrackfuelloadedtoindividualportsthis

wouldbeoflimiteduseasshipsandplanesrefuelinginaparticularportcouldbecarryingcargoof

anytypebetweenanycountrypairintheworld.Withoutknowingwherefuelisusedwecannot

evaluatethetotalemissionsassociatedwithaparticulartradeflow(i.e.,aspecificproducttraded

betweenacountrypair).Norcanweestimatewhetheremissionswillrisefasterorslowerthan

overalltradegrowth,orunderstandwhichtradeflowswouldbemostaffectedbyeffortstomitigate

emissions.

Complicatingmattersfurther,thecontributionoftransporttotrade‐relatedemissionscan

differdramaticallyacrosstradeflows.Standardanalysesinthetradeliteraturefocusontrade

value,whileignoringtheweightoftradeandhowgoodsmove.Butemissionsdependonthemode

employedandweight,notvalue,transported.Onemilliondollarsofcoalisvastlyheavierthana

milliondollarsofmicrochips,withcorrespondinglylargertransportemissions.Trucks,rail,

airplanesandshipshavesignificantlydifferentGHGemissionsandmodalusevarieswidelyacross

tradeflows.Onekilogramofcargoflownonekilometeronaplanegeneratesbetween50and200

timestheemissionsofthatsamekg‐kmonabulkcargocarrier.Theproductandpartner

compositionoftradehasafirst‐orderimpactonthetypesoftransportationemployed,andonthe

associatedGHGemissions.Asaconsequence,welearnlittlefromtheaggregateincidenceof

transportemissionsthatcanbedirectlyappliedtoparticulartradeflows.

Thepurposeofthispaperistoprovidetwoexercises,bothofwhicharenovelinthe

literature.Inthefirstwebuildanextensivedatabaseonoutputandtransportemissionsassociated

witheveryorigin‐destination‐producttradeflowworldwideinabaseyear2004.Weemploythis

databasetoquantifythecontributionofinternationaltransporttototalemissions,andtohighlight

systematicpatternsoftransportemissionintensitiesacrossproductsandtradepairs.Inthesecond

exercise,wecalculatetheemissionsgrowthduetoasimulatedchangeinglobaltradearisingfrom

  5

tariffliberalizationandunevenlydistributedGDPgrowth.Inanalyzingthesimulatedchangesin

overallGHGemissions,wedistinguishbetweenscale(i.e.,changesinthederiveddemandfor

internationaltransportservices)andcompositioneffects(i.e.,changesintherelativeuseof

transportmodesofvaryingemissionintensities).4

Webeginbycombiningtradeandemissionsdatabymodeinordertoprovideafull

accountingoftheemissionsassociatedwithinternationaltransportationforeachindividualtrade

flow.This“bottom‐up”accountingofemissionsyieldsaggregateworldwideemissionsthatare

remarkablyclosetomatchingthe“top‐down”accountingprovidedbytheITF2010.UnliketheITF

aggregatedata,theseemissionsnumbersarespecifictoeachorigin‐product‐industrialsector.This

allowsustocalculatetheemissionsassociatedwithadollaroftradeanddecomposeitintoa

productionandatransportcomponent.

Wenextdescribetheimportanceoftransportrelativetoproductionemissionsforspecific

tradeflows,andshowwhichtradeflowsareespeciallyemissionsintensiveoncebothcomponents

aretakenintoaccount.World‐wide,33percentoftrade‐relatedemissionscomefrominternational

transport,thoughthisnumberisconsiderablyhigherinthemanufacturingsectors:80percentof

trade‐relatedemissionsinmachineryexportscomefrominternationaltransportation.Thereis

alsowidevariationacrosscountriesinthecontributionoftransporttotrade‐relatedemissions.At

thelowend,only14percentofIndianandChineseexportemissionscomefromtransport,while

transportisresponsiblefor66percentofUSexportemissionsduetosubstantialuseofaircargo.

Themagnitudeoftransport’scontributiontototalemissionssuggeststhatpoliciesdesignedto

mitigatecarbonoutputmusttakeinternationaltransportintoaccountandfurther,thatthedesign

ofsuchpoliciescouldhavepronounceddistributionaleffects.Forexample,theUSisresponsible

foronethirdoftransportemissionsbutonly12percentofoutputemissions.AndwhileUSimports

                                                            4Inoursimulationexercises,thetechniqueeffect(i.e.,changesintheemissionintensityoftransportservices)isheldconstantatthebaseyearlevel.Noticethatwhileseveralstudieshavedecomposedtheoverallchangeinproductionemissionsintoscale,compositionandtechniqueeffects(seeforexampleLevinson,2009;Gretheretal.,2010),ourfocusinthispaperisontrade‐relatedemissions. 

  6

andexportsareverysimilarintermsoftheemissionintensitiesofproduction,onceweinclude

transport,itsexportshavedoubletheemissionintensity.Whethertransportemissionsare

allocatedtotheexporterortheimporterthusbecomesasignificantissueforwelfareanalysis.

Risingtradeinducesemissionchangesbyboostingtransportemissions,andbyreallocating

productiontowardcountrieswithdifferentproductionemissionintensities.Bycharacterizingboth

productionandtransportemissionsfromtradeflowswecanaddresssystematicallythequestions

answeredpreviouslyusingcasestudies,namely,doesconsumingforeigngoodsraiseorlowerGHG

emissionsonceinternationaltransportisaccountedfor?Weexamineasetof“partialequilibrium”

reallocationsinwhichacountrylowersitsownproductionandinsteadbuysthegoodfromabroad.

Justoveraquarterofchangesinspecializationwouldleadtoareductioninemissions,withmuch

highernumbersinresource‐basedindustriesandinthedevelopingworld.5

Thesepartialequilibriumreallocationsaremeanttobeillustrative.Theydonot

contemplatewhetherthereallocationisfeasible,whatkindsofshockswouldinduceit,orwhat

possiblegeneralequilibriumeffectsmightexacerbateorattenuatethechange.Toconsiderthese

issueswenextsimulatethelevelandcompositionoftradegrowthinfourscenariosrelatedtotrade

liberalizationandafifthscenarioexaminingdifferentialchangesincountryGDPgrowthrates

throughtheyear2020.Tradeliberalizationandoutputgrowtharelikelytoleadnotonlytogrowth

inthequantityoftradebutalsotochangesinitsproductandcountry‐paircomposition.The

questionisthenwhethergrowthwilloccurinhighorlowemissionscategories,andwhether

transportemissionsarelikelytogrowmorerapidlythanoutputemissions.Combiningsimulated

outputandtradechangeswithouremissionsdatawecanthencalculatethepredictedgrowthin

emissionsfromtrade.

Ourfindingsareasfollows.TradeliberalizationscenarioscurrentlycontemplatedundertheDoha

WTOroundgenerateverysmallchangesinoutput,exports,andGHGemissions.Fullliberalization

                                                            5Theseemission‐reducingtradepairsarenon‐trivial,correspondingto31percentofglobaltradebyvalue. 

  7

resultsina6percentincreaseintrade,concentratedinthoseproductsthataresubjecttothe

highestratesofprotection.Moreimportantly,liberalizationeliminatestariffpreferencesenjoyed

primarilybynearbytradingpartners(e.g.,NAFTAandtheEU).Tradeshiftsawayfromproximate

partnersandtowarddistantpartnerswhocannotbereachedbylandtransport.Useofaircargo

rises,andwithit,GHGemissionrise23‐42percentfasterthantrade.

Incontrasttothemodesteffectsfromtariffliberalization,projectedoutputgrowth(a75percent

increaseingrossworldproductby2020)leadstoprofoundchangesintradeandemissions.

Exportsriseat3.8percentperyear,80percentcumulatively,whiletransportservices(kg‐km)rise

173percentcumulativelyastradeshiftstodistantbutrapidlygrowingChinaandIndia.Transport

emissionsgrowfasterthantradebyvalueandfasterthanoutputemissions,withespeciallyrapid

growthinmaritimeemissions.

Thepaperproceedsasfollows.SectionTwodescribesthemethodologyandSectionThree

describestheconstructionofthemaindatacomponentsforourexercises.SectionFourprovides

evidenceoncurrentcontributionofinternationaltransportationtoGHGemissionsfrom

internationaltrade.SectionFiveprovidessimulationsoftradegrowth,andcalculateshowthis

growthwouldaffectmodaluseandemissions.SectionSixconcludes.

II. Methodology:BaseYearEmissions

TheInternationalTransportForum(ITF2010)usesdataonfuelconsumptiontocalculate

emissionsassociatedwithinternationaltransport.Asdiscussedintheintroduction,this“top‐

down”approachprovidesaccuratemeasuresofworldwideemissions,buthasanumberof

significantdrawbacksbecauseitcannotassignemissionstoparticulartradeflows.Weusea

“bottom‐up”approachinwhichweconstructtheemissionsassociatedwithatradeflowby

calculatingthequantityoftransportationservicesforthatflowprovidedbyeachtransportation

mode,andmultiplyingbyemissionsperunitoftransportationservices.

  8

Denote astheGHGemissions6associatedwithtransportinggoodgfromoriginoto

destinationd.VAListhevalueofthatflow,andWVistheweighttovalueratiosothat

isthequantityoftheflowinkilograms.Acountrypairmayshipproductgusingmultiple

transportationmodes.Thequantityshareofmodeminthatflowis ,so

givesthequantityoftheflowforeachmode,inkg.Multiplyingby thedistancetraveled

fromotodformodemgivesusameasureoftransportationservices,foreachmode,measuredina

commonunit(onekgofcargomovedonekilometer).Finally,multiplyingby ,theGHG

emissionsproducedbymodemwhenprovidingonekg‐kmoftransportationservices,and

summingoverallmodesyieldsthetotalemissionsassociatedwiththattradeflow.

(1)

Thisbottomupapproachhasafewlimitationsowingtodataavailability.Thisformulationimposes

aconstraintthatemissionsforagivenmodearecommontoallproductsandcountrypairsandare

linearinweightanddistance.Assuchitmaskstwopotentiallyimportantsourcesofheterogeneity.

One,sometradeflowsmayemployolder,smallershipsandplaneswithhigheremissionsperkg‐km

oftransportationservices.Wepartiallyadjustforthisprobleminthedatabyallowingformultiple

typesofoceanvesselsthatarespecifictocertaincargos,andbyexperimentingwithaviation

emissionsdatathatreflectthemostefficientplanesversusthoseinuseinexistingfleets.Two,

thereareemissionsassociatedwith“fixedcosts”oftransport,incurredindependentofdistance

traveled,includingporttimeforshipsandhigherlanding/takeoffemissionsforplanes.We

providecalculationstosuggestthattheseproblems,whilesignificantatveryshortdistances,

becomeinsignificantattheinternationaldistancesseeninthedata.

Anadditionallimitationrelatestoemissionsfromdomestictransportlinkedtotrade.All

productionrequiresdomestictransport,andwecapturethisinputanditsassociatedemissionsas

                                                            6“GHGemissions”refertobothCO2andnon‐CO2emissions,representedasCO2equivalents. 

TodgE

*odg ogVAL WV

modgQS * * m

odg og odgVAL WV QS

modDIST

me

* * * *T m m modg odg og odg odm

E VAL WV QS DIST e

  9

partofoutputemissions.Ifproductionforexternaltradeusesdomestictransporttothesame

extentasproductionfordomesticuse,thenwecapturedomestictransportemissionsaccurately.

However,insomeinstancesexternaltrademayrequiremovementofgoodsovergreatinternal

distances,whileinothers(productionnearborders,ornearairorseaports)externaltrademay

employverylittledomestictransport.Thismayresultinunder‐orover‐countingtrade‐related

emissions,butwehavenoclearindicationifthereisabiasorwhichwayitruns.Notethatthisis

fundamentallysimilartoanycaseinwhichaheterogeneousproductiontechnologyischaracterized

byanaggregatetechnology.

Startingfromequation(1),wecanprovideanumberofcomparisonsandcalculations.

Tradeflowsaremostcommonlyreportedinvalueterms.Pullingthevalueofthetradeflowoutof

thissummationwecandecomposethequantityoftransportationemissionsfromtheflowintoa

scalemeasureandanintensitymeasure

(2)

Usingthisbasicdecompositionwecancomparethetransportemissionsfromexportsacross

countries.Summingoverimportersandproducts,anexportero’semissionsare

(3)

where istheshareofdestinationd,goodgintotaltradefororigino.Transportemissions

dependonthescaleoftradeandthetransportemissionintensityofadollaroftrade.Thelatterisa

trade‐weightedaverageofemissionsfromindividualflows.Ifanexporterengagesintradewith

moredistantpartners,tradesheaviergoods,orusesaviationmorethanmaritimetransportitwill

haveahigheraggregatetransportemissionintensity.Wecanprovidesimilaraggregationsby

importers(aggregatingoverexportersandproducts)orbyproducts(aggregatingovercountry

pairs).

* * * *T T T m m modg odg odg odg og odg odm

E VAL e where e WV QS DIST e

* * *T T To o o o odg odgdg

E VAL e VAL s e

odgs

  10

Wecanalsousethisdecompositiontocomparetheemissionintensityoftradearisingfrom

twodistinctsources:productionoftradedgoodsandtransportoftradedgoods.Beginbywriting

theemissionsfromoutputofgood(orservice)gincountryoastheproductofoutput(indollars)

andemissionsperdollarofoutput,

(4)

sothataggregateemissionsinacountryareanoutputweightedaverageofemissionsforeach

activity.

EoY Yo * sgg

*eogY

Aggregatingagainoverallcountriesyieldsworldwideemissions,similartothatfoundinTable1.

Ifweinsteadmeasurebothoutputandtransportemissionsasanintensity(i.e.,CO2equivalentsper

dollar),wecancalculatethecontributionofeachemissioncomponenttothetotalemission

associatedwithaparticulartradeflow.Foranyparticularo‐d‐gflowwehave:

(5)

Thisrepresentationisalsoconvenientasitallowsforanimmediatecalculationofthetariff

equivalentofpoliciesdesignedtoreducetotaltrade‐relatedemissions.Supposeatradeflow

produces200gramsofCO2equivalentemissionsperdollaroftrade,andfacesacarbontaxof$50

perton.Thecarbontaxraisesthecostofthattradeflowbyonepercent,andsoisequivalenttoa

1%tariff.

Muchofouranalysiswillconsistofafewbasicbutinformativecalculations.Wewill

comparethemagnitudesof forparticulartradeflows,andintheaggregatefordifferent

regions.Wewillalsoanalyzewhethermovingoutputfromahighemissiontoalowemission

producerinducesemissionchangesthatarelargeorsmallrelativetoreallocatingtradeacross

partnersfromhightransportemissiontradeflowtoalowtransportemissiontradeflow.

*Y Yog og ogE Y e

*T Yodg odg og odgE e e VAL

,T Yodg oge e

  11

III. Data

InthissectionwedescribethemaindatacomponentsnecessarytodescribeGHGemissionsfrom

outputandinternationaltransportationinthebaseyear.Thesedatacomponentsare:theweight,

value,andmodalsharesoftradeforeachbilateralpairandproduct;theGHGemissionintensityfor

eachtransportationmode;andGHGemissionsassociatedwithoutputforeachproducerxsector.

Giventheimprovementinqualityandcoveragethatthesenewsourcesofdataprovide,andtheir

likelyuseinfutureresearchontransportandtrade‐relatedemissions,wedevotemuchattentionto

documenttheconstructionofthedataset.

A. Aggregation

Thesedisparatedatacomponentsmustfittogetherprecisely,usingthesamelevelofregionaland

productaggregation.Inthiswearemostconstrainedbythedataavailableforoutputemissions,

whichwetakefromthedatabaseunderlyingversion7oftheGlobalTradeAnalysisProject(GTAP)

model.TheGTAPdatabaseisidealforourpurposesbecauseitcontainsdetailedinformationon

energyusageandGHGemissionsbyorigincountryandsector,andbecausewecanusetheGTAP

computablegeneralequilibriummodelinthefinalsectionofthepaperforperformingtrade

liberalizationandoutputgrowthsimulations.

Atitsmaximumdisaggregation,GTAP7allowsonetomodelproductionandtradefor57

tradedandnon‐tradedsectorsbetween113countries.Whileitisnotcomputationallyfeasibleto

runtradeexperimentswiththefull113countryx57sectorversionofthemodel,GTAPallowsfor

flexibleaggregationacrossregionsandsectorsinordertoexaminecertainespeciallyinteresting

subsetsofthewholedataset.Forcurrentpurposes,weemployanaggregationofthemodelwith40

regions(i.e.,1600bilateralpairs),and23tradedgoodsand6non‐tradedgoodssectors,thedetailed

listingofwhichisreportedinAppendix1.

Thisparticularaggregationschemewaschosentoservetwopurposes.One,countriesand

sectorswith“similar”transportationcharacteristicsareaggregatedtogether.Forexample,allsub‐

  12

categoriesofbulkagriculture,whichprimarilyusesmaritimetransport,areaggregatedintoone

categorywhilesub‐categoriesofprocessedagriculture,whichismorelikelytoemployair

transport,areaggregatedintoasecondcategory.Two,weemploycountrylevelaggregationin

caseswherewehavedetailedweight/valueandtransportationmodedata,andbroadergeographic

aggregationforregionswherethesedataarelacking.Forexample,werepresenttheMiddleEast

andAfricainonly3aggregatedregions,whileEuropeisrepresentedwith15individualcountries

and3aggregatedregions.Thisallowsustominimizetheamountofimputationthatmustbe

employedtocompletethedatabase.

B. TradeandOutputintheBaseYear:Weight/Value,andModalShares

Recallingequation(1),weneeddataonthevalueoftrade,theweight/valueratio,andthequantity

sharesofeachmode.

OurbasedatasetforthevalueofoutputandtradecomesfromtheGTAP7database,

aggregatedto40regionsand29sectors(23traded)in2004.Bymultiplyingvaluesindollarsbya

weight/valueratio(kg/dollar)thatisspecifictoeachoriginxsector,weconvertthesevalueof

tradenumbersintokilograms.Thisphysicalunitofmeasurementisconsistentacrosscountries

andproducts,ismeaningfulfromatransportationperspective,andcanbeuseddirectlytocalculate

GHGemissionsfromtransport.

Toconstruct wedrawonthreeprimarydatasourcesthatreporttradebyvalueand

weightatthe6digitleveloftheHarmonizedsystem(roughly5000products).Theseare:US

ImportsandExportsofMerchandise;EurostatsTrade(coveringtheimportsandexportsof27EU

countries)7,andtheALADItradedatabase,coveringtheimportsof11LatinAmericancountries

(Argentina,Bolivia,Brazil,Chile,Colombia,Ecuador,Mexico,Paraguay,Peru,Uruguayand

                                                            7DataontradeoutsidetheEUbytransportmodeareavailableattheHS6level.DataonexportsfromEU15toEU25countries(excludingBulgariaandRomania)bytransportmodearereportedatthe3digitleveloftheNSTRandwerecompiledonspecialrequestbystatisticiansatEurostats. 

ogWV

  13

Venezuela)fromallexportersworldwide.Thebilateralpaircoveragerepresentedbythesethree

datasetsisdisplayedinAppendix2.

ItisnecessarytoconcordtheHS6datatothe23merchandisetradesectorsusedinour

aggregationoftheGTAPmodel.Thismeansthatforeachimporterandexportertheremaybe

severalhundredHScodescorrespondingtoasingleGTAPsectorsuchas"electronicequipment".

Toarriveataweight/valueratioforeachexporterandproduct,weseparatelysumtheweightof

tradeandthevalueoftradeandexpressthemasaratio.Thisisequivalenttoashare‐weighted

averageoftheweight/valueratioforeachHS6producttradedbythatexporter.8

ForreferencewereportdatabycommodityinAppendixTableA1.Thisincludesinitialtariffrates

andweight/valueratios(eachexpressedasatrade‐weightedaverageoverallcountrypairs),along

withtheshareofeachcommodityinworldoutput,worldtradebyvalue,andworldtradeby

transportationservicesunits(kg‐km).Ofinterest,someofthegoodsthatrepresentalargervalue

shareintrade(electronicequipmentandmachinery)representasignificantlysmallersharein

transportationservices.Thisreflectslargedifferencesinweight/valuebetweenthese

manufacturedgoodsandheavyproductssuchasbulkagriculture,minerals,andoil.

Thedataformodalshares, ,comefromthesamethreesourcesastheweight/value

datadescribedabove.Eachofthosedatasetscontainsinformationontheweightandvalueoftrade

byorigin‐destination‐productandtransportmode.TheUSdatasplittradeintoairandocean

modes,buthasnomodalinformationonoverlandtransportfromMexicoandCanada.To

disaggregatetheseflowsintotruckandrailweusesupplementarydatafromtheTransborder

                                                            8Wedonotemployweight/valueratiosthatvaryacrossimportersbecausewedonothaveweightdataforeveryo‐d‐gtripletinthedata.Apartfromtheo‐dpairswithnodata,theweightfieldismissingfromroughly20percentofEUobservations,thoughthesetendstoberelativelysmallvalueflowsandunrelatedtomodaluse.Ingeneral,becauseaggregatingoverimportersforagivenexporterandproductreducesmeasurementerrorinthemorenoisyweightdata. 

modgQS

  14

SurfaceFreightData.9TheEUandALADIdatasetsreporttradebyair,ocean,rail,andtruckmodes.

ModalusefortheUS,ALADI,andEUtradewithnon‐EUpartnersaremeasuredattheHS6level.

Intra‐EUtradeismeasuredattheNSTR3digitlevel.Toconstructmodalquantityshares,wefirst

concordtheHS6(orNSTR3)productcodestoGTAPsectorgroupings,andaggregatesothatwe

havetheweightoftradeforeachmodewithineacho‐d‐gtriplet.

For35percentofworldtradebyvaluewehavenodirectdataonmodaluse.Inthesecases

weestimatemodalsharesasafunctionofgeography,country,andproductcharacteristicsbasing

ourestimationsampleonthosecountrypairsthatdoreportmodaldata.Theseregressionshave

goodexplanatorypower,especiallyinthevastmajority(allbut2percent)oftheremainingcases

wherelandtransportisnotanoption.DetailsareprovidedinAppendix2.

Theresultsofourdatacollectiongenerateafullmatrixofmodalsharesforeachorigin‐destination‐

GTAPsectorbyvalue,weight,andtransportationserviceunits(kg‐km).Table2providesmodal

sharesfortheimportsandexportsofeachcontinent,bytradevalueandKG‐KM.AppendixTable

A2reportsthenumbersbytradedsectors.

Afewthingsarenotable.Therearelargedifferencesacrossregionsinthevaluesharesof

thetransportationmodesthatlargelyreflectgeography.Forexample,NorthAmericaandEurope,

withimportantland‐adjacenttradepartners,relymuchmoreheavilyonroadtransport.10

Substitutionbetweenairandoceancargoisespeciallyimportantasitreflectsthelargestgapin

emissionintensities.Worldwide18percentoftradebyvalueisair‐borne,withmuchhigherratios

inNorthAmericanandEastAsianexports.Excludingland‐basedmodes,airtransportrepresents

                                                            9TheTBSFdatahaverailv.roadsplitsattheHS2level.Wetakeeachland‐basedtradeflowfromthemoredisaggregatedHS6dataanddivideitusingthesplitsfoundinthecorrespondingHS2data.Wethenaggregatetothebroader23sectorsfoundintheGTAPdata. 10MostofAsiahasverysmallsharesoflandtransportbecausethelargesttradingpartnersareseparatedby(short)stretchesofocean.SouthAmerica,forwhichlandtransportisactuallyanoptionhasratherlowlandtransportshares,probablybecauseeconomicactivityisconcentratedoncoastsratherthanintheinteriorsclosetolandborders.Whenwedisaggregatetothecountryleveltherearemoredramaticdifferences.Europeasawholehasveryhighsharesofrailandroadtransport,exceptforcountriesliketheUK,Ireland,andFinland. 

  15

48percentofinternational(air+ocean)cargoforNorthAmericanexportsand27percentfor

EuropeanandAsianexports.

Itisalsoinstructivetocontrastthevalueoftradewiththetransportationservices(KG‐KM)

employedbytrade.Here,seatransportdominateswith95percentoftransportationservices

provided.Productsthatareheavy,andthataretransportedlongdistances,aremuchmorelikelyto

besea‐borne.Thelargestdifferencerelativetovaluesharescomesintheuseofroad‐based

transport:whileitrepresentsnearlyhalfofEuropeanimportsbyvalueitisonly5percentof

EuropeanimportsbyKG‐KM.Roadtransportconstitutesalargeshareofvalueandweightmoved

inEuropeantrade;howeveritisconcentratedinthetradeofproximatepartners.Asaresult,road

transportrepresentsaverysmallshareofkilogram‐kilometersshipped.

C.GreenhouseGasEmissionsbyTransportMode

Wedrawondatafromseveralstudiestocalculateemissionsperkg‐kmofcargomovedbyeachof

thefourtransportmodes:ocean,air,rail,androad.Thesesources,anddataonemissions,are

reportedinTable3.Webrieflyremarkonthedataformaritimeandaviationemissionshere.

Themostrecentandcomprehensivestudyformaritimetransportcomesfrom"ShipEmissions

Study",NationalTechnicalUniversityofAthensLaboratoryforMaritimeTransport(2008).It

reportsemissionsingramsofCO2pertonne‐kmshippedformanydistinctshiptypes,aswellas

variabilityacrossvesselsofdifferentsizeswithineachtype.11InTable3,wereproducethefleet

averagesforsixshiptypes,andnotetheshiptypesemployedforeachtradedgoodssectorinour

model.Whileotherstudieslackthedetaileddatabyshiptypereportedinthatstudy,thosestudies

(Kristensen2006,GiannouliandMellios,2005)thatprovidedataforcontainerizedcargoarriveat

similaremissionnumbers.

                                                            11Ingeneral,CO2emissionspertonne‐kmshippedaremuchlowerforlargervesselswithineachtype.Forexample,post‐Panamax(>4400TEU)containershipsproduce1/3theemissionsofalessthan500TEUfeedership.Becausewehavenodataontheshipsizecompositionofflows,weemployfleetaveragesforeachfleettype.ThestudyalsoprovidesdataforhighlyspecializedshiptypessuchasReefersandRo‐Ros.Wedonotemploythisdataasourbroadertradeaggregatescontainamixofgoodsthatwouldemploythesespecializedtypesasasmallsubsetofgoodsthatgenerallyemploycontainervessels. 

  16

Insearchingtheliteraturewefoundfewestimatesofemissionsassociatedwithaircargo.These

arriveatwidelyvaryingestimatesofemissionspertonne‐km,andprovidelittledetailon

methodology.Forexample,aMaersk2007pamphletcitedintheUniversityofAthens(2008)study

reportsthataBoeing747‐400emits552gramsofCO2pertonne‐kmshipped.ACaliforniaClimate

Changepamphletfor2006reportsemissionspertonne‐kmshippedrangingfrom476‐1020grams

ofCO2.

Giventhiswiderange,weattemptedourowncalculationsbasedonfuelusageandfleet

characteristics.TheAirTransportAssociationofAmericareportsfleetwidefuelusageandton‐

milesofcargoshippedforUScargoairlines.UsingthesetotalswecalculatethatUScargoairlines

used163.6gallonsofjetfuelperthousandton‐milesshipped.Convertinggallonsofjetfuelinto

gramsofCO2andcargosintotonne‐km,wecalculateCO2emissionsof963.5gramsofCO2per

tonne‐km.

WealsoattemptedtoconstructanindependentestimateofCO2emissionsassociatedwith

aircargousingdatatakenfromAircraftEconomics,1999,“FreighterCostComparisons”.This

sourceprovidesdatafor14majorcargoplanetypesincludingtotalfueluse,revenueton‐miles

flown,andshareinthefleet.Combiningfueluse,emissionspergallonofjetfuel,andton‐kmflown

itispossibletoconstructameasureofaverageCO2emissionspertonne‐kmflown.Thenumbers

rangefrom493to1834,dependingontheplanetypeandhowitwasused(i.e.forshortv.longhaul

cargocarriage).Forcomparison,applyingthismethodtotheBoeing747yieldsemissionsof700

gramsofCO2pertonne‐km,whichisclosetotheMaerskstudy.Takingaweightedaverageof

theseemissionnumbersoverthefleetsharesreported,wearriveataverageemissionrateof972

grams.Finally,ifweupdatethefleetcompositionusing2008shares(fromATA)wearriveat

averageemissionsof912.1grams.

Inthecalculationsthatfollowweemploy552g/t‐kmasa“LOW”emissionsvaluefor

aviation.Thiscorrespondstouseofthemostefficientaircraftonthelongestflights.Weuse950

  17

g/t‐kmasa“HIGH”emissionsscenario,anditcorrespondstoauseofamixedfleetofsmaller

planesonshorterflights.

Toamplifythislastpoint,landing/takeoff(LTO)requireshighfueluserelativetocruising,but

thiseffectismostpronouncedatshortdistances.WecollecteddetaileddatafromEEAEmission

InventoryGuidebook2007onfuelusageonLTOandcruiseforavarietyofplanesandcalculated

emissionsperton‐kmforvarioustriplengthstoseehowthiswouldaffectourcalculations.For

example,a747‐400witha60%loadfactorona1852kmflightemits556g/t‐km(closetoourLOW

scenario),whilethatsameplaneandloadfactoremits912g/t‐kmona463kmflight.This

representsanimportantdiseconomyofscaleformuchshorterflightsofthekindonewouldsee

withdomesticUScargousage.However,onceonegetstoflightsofinternationaldistances,the

effectsbecomemuted.At463km,LTOfuelrepresentsnearly55%oftotalfueluse,droppingbelow

5%fordistancesabove6000km.Themediantraveldistanceinourdatais8000km.

Thefinalcomponentweneedtocalculatetransportemissionsisdistancetraveled.Forrail,

road,andairtransportwerelyonthesimpledistancesreportedbytheCEPII.12Bilateraldistances

betweencountrypairsarecalculatedfollowingthegreatcircleformula,whichuseslatitudesand

longitudesofthemostimportantcityineachcountry.13Foroceantransportdirectlinedistances

significantlyunderstateactualdistancestraveled.Containershipsrarelytravelpointtopoint

betweenimporterandexporterandfrequentlystopatmultipleportsofcallenroute.Wedrawona

datasetofactualshipitinerariesfromHummelsandSchaur(2011)thatallowustocalculateactual

distancestraveledduetotheseindirectroutings.

D.GreenhouseGasEmissionsfromOutput

TheGTAP7databaseprovidesdataonGHGemissionsproducedbyeachsectorgineachcountryo,

inequation(4).Webrieflysummarizehowthesedatawereconstructed,anddirectreadersto

                                                            12TheCEPIIdatasetisavailablefordownloadathttp://www.cepii.fr/anglaisgraph/bdd/distances.htm. 13Foraggregationattheregionallevelweweightedeachconstituentcountry’sdistancebyitsGDPshareintheregion’sGDP. 

YogE

  18

moredetaileddiscussionsavailablefromLee(2008)andRoseetal(2010).Foreacho‐gpair,the

databasecontainsinformationonuseofsixenergyinputs(coal,oil,gas,petroleumproducts,

electricity,andgasdistribution).Energyusediffersacrosscountriesandsectorsasafunctionof

theenergyintensityofproduction,theefficiencywithwhichenergyisused,andtheavailabilityof

energyinputsintherespectivecountry.UsingastandardformulationprovidedbyIPCC(1997)

guidelines,thequantityofenergyinputsisthenconvertedintoCO2emissions.Finally,thesedata

aresupplementedbycalculatingnon‐CO2greenhousegasesemittedasaby‐productofproduction

(primarilyinagriculture).TheseareconvertedintoCO2equivalentsbasedontheirglobalwarming

potentials,followingthemethodologyinUSEPA(2006).

CombiningthesedatawehavetotalGHGemissionsforeachcountryoandsectorg.To

providecomparisonstoourtransportationemissions,wedescribetheseasemissionintensitiesper

dollarofoutput bydividingtotalemissionsforo‐gbythemarketvalueofoutput.

IV. TransportandOutputEmissionsintheBaseYear

Inthissectionweprovidethreemainexercises.First,wecompareour“bottom‐up”approachto

calculatinginternationaltransportemissionstotheITF“top‐down”approachasamethodological

check.Second,wecomparetransporttooutputemissionsforagiventradeflowtogaugethe

importanceoftransportemissionsintrade.Third,weusethetransportandoutputdatain

combinationtoconsiderwhethersomepartialequilibriumchangesinthepatternofspecialization

andtradewillyieldrisingorfallingGHGemissions.

A. AggregateEmissionsfromInternationalTransport:ComparingMethodologies

Our“bottom‐up”approachtoemissionscalculatesthequantityoftransportationservices(KG‐KM)

performedbyeachmodeineachorigin‐destination‐producttradeflow,andthenmultipliesby

emissionsperKG‐KMforeachmode.Thisyieldstransportationemissionsthatarespecificto

nearly36,000individualtradeflows.Summingoveralltradeflowswehaveanalternativeestimate

Yoge

  19

oftotalCO2emissionsfrominternationaltransport.Howdoesthisbottomupapproachcompareto

thetopdownITF(2010)approachbasedonworldwidefuelusage?Theansweris:surprisingly

well.In2004,theITFcalculatesthatinternationalaviationandmaritimetransportwasresponsible

for910milliontonsofCO2production,520frommaritimeand390fromaviation.Wecalculate

522milliontonsofmaritimeemissions.WhenweemploytheLOWemissionsintensitywe

calculateaviationemissionsof419(andatotalof941milliontons)in2004.14Accordingly,wewill

focusmostofoursubsequentcalculationsontheLOWaviationemissionsscenario.Whilethereare

largemethodologicaldifferencesbetweenourapproachandtheITF,wematchemissionaggregates

quiteclosely.Thisgivesusconfidencethatourestimatesfordisaggregatedflowswillalsobe

informative.

Usingourmorecomprehensiveemissionsdatawecalculatethattotalinternational

transportemissionsare1205milliontonsin2004.Measuredrelativetothevalueofworldtrade,

internationaltransportemits146gramsperdollaroftrade,whileoutputoftradedgoodsgenerates

300gramsperdollaroftrade.Thatis,totaltrade‐relatedemissionsare446gramsperdollar,of

which33percentcomefrominternationaltransport.Forperspective,a$50pertoncarbontax

appliedtotheaverageinternationaltransportemissionswouldbeequivalenttoa0.73percent

tariff.

Ourcalculationof1200milliontonsofCO2equivalentcontrastswiththe910milliontons

calculatedbytheITF.Byomittingroadandrail,theITFcalculationmisses28percentof

internationaltransportemissions.ThismayhelptoexplainacuriouspatterninTable1.Usingthe

ITFemissionnumbersweseethatinternational(maritimeplusaviation)transportemissionsper

dollarofworldtradedroppedsharplyfrom159g/$in1990to93g/$in2004.Whydidtrade

                                                            14NotethattheHIGHaviationintensity,basedonthecurrentcompositionoftheUSaircargofleet,yieldsaviationemissionsof721milliontons,muchhigherthantheITFvalues.Therearetwopossibleexplanationshere.One,theITFseparatesfueluseintodomesticandinternationalusage.Ifsomeinternationalfuelusewereinaccuratelyrecordedasdomesticusage,theywouldunder‐estimateemissions.Two,itmaybethatthecompositionoftheUSaircargofleet,includingsmallerplanesandshorterroutesthanaretypicallyfoundininternationalaviation,mayoverstateemissions. 

  20

appeartobecomelessemissionintensivefrom1990‐2004?Thekeyisthatland‐basedtrade,

omittedfromtheITFemissionvalues,interactsinaninterestingwaywiththestructureof

protection.Inthisperiodtradegrewespeciallyfastwithland‐adjacentpartners,15promotedby

policymeasuresthatofferpreferentialtariffrates,investmentrules,regulatoryharmonizationand

currencyunionwiththoseclosepartners.Table2showsthatinternationalroadandrailare

responsiblefornearlyathirdofworld‐tradebyvalue–halfofintra‐Europeantradebyvalueisland

based.

Note,however,thatthispatternneednotpersist.Weretradeliberalizationatthe

multilateralleveltoerodepreferentialtariffrates,orwereoutputtogrowmorerapidlyoutsideof

NorthAmericaandEurope,tradewouldlikelyshifttowardsdistantpartners.Werevisitthispoint

inSectionFive.

B. EmissionsfromTrade:ComparingOutputandInternationalTransportation

Webeginbycomparingtrade‐relatedemissionsfromoutputoftradedgoodsandinternational

transportatthelevelof35,880individualtradeflows(thatis,40exportersx39importersx23

tradedgoodssectors).WeplotthedistributionofemissionintensitiesasCO2gramsperdollarof

tradeinFigure1.Outputandtransportemissionsaresimilarlydistributedbecausetheyhave

similarmedians(transport‐120g/$,output‐137g/$)andarehighlycorrelatedatthelevelof

individualtradeflows.16

Thereisawidevarianceinbothtransportandoutputemissions,rangingfromclosetozero

gramsofcarbonperdollartowellover2kgofCO2.Thisvarianceisnotablebecausetheaverage

                                                            15Thispattern,insharpcontrasttotheconventionalwisdompointingtothe“deathofdistance”hasbeenpointedoutbyseveralauthorslookingattheeffectofdistancevariablesingravityregressions(DisidierandHead,2008;BerthelonandFreund2008),andotherswhohavenotedtheremarkablylargeeffectofNAFTAandEUliberalizationpoliciesontradewithinthoseregions. 16Tradeflowswithhighoutputemissionsalsohavehightransportemissions,andthisistruewhetherwelookattotalemissionsoremissionsintensities.Aregressionoftransportemissionintensitiesonoutputemissionintensitiesfortheexporteryieldsanelasticityof0.26andanR2=0.10.Aregressionoftotalemissionsfromtransportontotaloutputemissionsyieldsanelasticityof0.76andanR2=0.73. 

  21

valueof145grams/$fortransportasawholeisdrivenbyaconcentrationoftradeino‐d‐gflows

withverylowemissionintensities.Therearemanyflowswithmuchhigheremissions,andcarbon

taxationwouldhaveapronouncedeffectonthesegoods.Forcomparison,theworld‐wideaverage

tariffrateinourdatais3.2percent,whichisequivalenttoacarbontaxof$50appliedtoatrade

flowwithtransportemissionsof650grams/$.

Nextweexaminethecontributionoftransportemissionstotrade‐relatedemissionswhen

calculatedonacommonperdollarbasis.Weaggregatetransportemissionsforeachindustryby

summingoverallcountrypairs.Takingthetransportemissionsforeachindustryanddividingby

thevalueoftradeyieldsa(weightedaverage)transportemissionintensityforthatindustry.A

similarprocedureyieldstheaverageoutputemissionsintensity.Addingthesetogetherasin

equation(5)enablesustocalculatetheshareoftransportemissionsintotaltrade‐related

emissionsforeachindustry.Figure2providesthiscomparisonwithindustriessortedfrom

smallesttolargesttransportemissionsshare(dataingrey,scaledisplayedontherightvertical

axis).Forperspectivewealsodisplaytransportemissionsforthatindustryasashareoftotal

transportemissions(datainblue,scaledisplayedontheleftverticalaxis).

Recallthatworldwidetransportisresponsiblefor33percentoftraderelatedemissions.Atthe

industrylevelweseewidedispersioninthesenumbers.Atthelowendarebulkproducts

(agriculture,mining)withsignificantoutputemissions,andwhichtendtobeshippedusingthe

mostefficientmaritimebulkcarriers.Atthehighendaremanufacturedgoods.Over75percentof

thetrade‐relatedemissionsoftransportequipment,electronicequipment,machinery,and

manufacturesnotelsewhereclassifiedcomefromtransportation.

InTable4weprovidesimilarcalculationsforinternationaltransportandoutputemissions

byregionalgroupingsandforselectedcountries(forthefullsampleofcountriesseeAppendix

TableA3).Thefirstthreecolumnsshowthecontributionofeachregiontotrade‐relatedemissions

worldwide,includingemissionsfromindustrialoutputandfrominternationaltransport.Thereare

  22

severalnotablepatternshere.First,thereisasignificantdifferencebetweentheoutputshareof

emissionsandthetradeshareofemissions.NorthAmericaandEuropearetogetherresponsible

forjustoverathirdofoutputemissionsbutover60percentoftransportemissions.TheUSaloneis

responsibleforalmostathirdofworldemissionsfromtransportationofexports.Theopposite

patternholdsforChina,whichisresponsiblefor20.8percentofoutputemissions,andonly3.5

percentoftransportemissionsfromexports.Second,formanyregionsthereisalargeimbalance

betweeninternationaltransportemissionsinimportsandexports.TheUSexportemissionsshare

ismuchlargerthanitsimportemissionssharewhilethisimbalanceisreversedfromtheEuropean

andEastAsianperspective.

Tosomeextentthesesharesaredrivenbythesizeofeachregion,relianceontrade,and

tradeimbalances.Toeliminatetheseeffects,intheremainingcolumnswecalculateemission

intensitiesforexportsandimports,measuredingramsofCO2equivalentperdollaroftrade.To

makethenumberscomparable,bothoutputandtransportemissionsarereportedasweighted

averagesofcountryxsectoremissions,wheretheweightsineachcasereflecttradeshares.17

Hereweseelargedifferencesbetweenregionsintheemissionintensitiesofoutputandtransport.

Thereissignificantvariationinoutputintensities,drivenlargelybythecommoditycompositionof

trade.SouthAmerica,OceaniaandtheMiddleEast/Africahaveveryhighoutputemissionsper

dollaroftrade,drivenbytheirrelianceonemissionintensivecommodityproduction.

Manufacturingorientedexportersseemuchsmalleroutputintensities.Perhapsmoresurprising

therearealsoverylargedifferencesinthetransportintensities.ThetransportationofUSexportsis

nearlyeighttimesmoreemissionintensivethanthetransportationofChineseexports,andsix

timesmoreemissionintensivethanEurope.Thisisaconsequenceofanunusuallylargerelianceon

aircargoinUSexports.

                                                            17Byusingtradeshares,theimportanceofaparticularsectoristhesameforbothoutputandtransportemissions.Werewetouseoutputsharesforoutput,goodswithalargeshareofoutputbutasmallshareoftradewouldskewtheaverages. 

  23

Thesenumbersmakeclearthatincludingtransportsignificantlychangesourperspectiveon

whichregionshaveemissionintensivetrade.India’sproductionoftradedgoodshas143percent

moreemissionsthantheUSperdollaroftrade,butafterincorporatingtransportation,itsexports

arelessemissionintensiveintotal.Wealsoseeastrongimbalanceinemissionintensities.East

Asianimportsaremuchmoreemissionintensivethantheexports,whilethereverseistrueforthe

US.

Asignificantadvantageofourapproachtoassessingtransportemissionsisthatitgivesus

theabilitytosortoutwhichregionsareengagedinespeciallyemissionintensivetrade.Aclear

implicationofthesenumbersisthatbothproductionandtransportationemissionsshouldbe

consideredwhenevaluatingpolicychangesdesignedtocurtailemissions.Insomecountriesthe

impactwillbefeltmostacutelyontheproductionside,whereasincountriesliketheUS,themain

effectwillprimarilybeontransport.Similarly,insomeclimatechangemitigationproposals,

internationaltransportemissionsaretobeincludedaspartofacountry’scarbonallocation.The

largedifferencesbetweenimportandexportemissionsshowninTable4suggesttheprecise

mannerinwhichthisisdonecouldbeveryimportant.Thatis,NorthAmericawouldmuchprefer

animportbasedallocationratherthananexportbasedallocation,whileEastAsiancountrieswould

prefertheopposite.

C. ReallocatingProduction:DoesMoreTradeMeanMoreEmissions?

Acentralquestionofthepreviousliteratureontradeandcarbonemissionsisthis:willrisingtrade

leadtohigherorloweremissions?Iftwocountriesengagedintradehavesimilaroutputemission

intensities,thenmoretrademeansmoreinternationaltransportandhigheremissions.However,if

thedifferenceinoutputemissionsislargeenoughtooffsetthetransportemissions,tradecould

loweremissions.

Thisquestionhasbeenpreviouslyaddressedwithcasestudies(Jones,2006;Simsetal.,

2007;Williams,2007)orwithlargelyimputeddata(PetersandHertwich,2008).Wecanuseour

  24

datatoaddressitcomprehensively.Tobeginweprovideastraightforwardpartialequilibrium

calculation.Welookatallpossiblereallocationsofproductioninwhichacountryreducesdomestic

productionofasectorandimportsthesamevalueofthegoodfromabroad.Denotingtheexporter

ororiginas“o”,thedestinationcountryas“d”,andthegood“g”,wecancalculatethechangein

emissionsassociatedwithconsumingthegoodas

(6) eodgc (edg

Y eogY ) eodg

T

Wewillconsiderallpossiblereallocationsoverallcountrypairs,whichmeansthatthefirsttermin

bracketswillbesymmetricallydistributedaroundzero.(Forexample,therearetwoobservations

fortheUSandChinatradingelectronics,oneinwhichtheUSistheorigin,andanotherinwhich

Chinaistheorigin.)Thequestioncanthenbeframedas:isthevariationinoutputemissionslarge

orsmallrelativetotransportemissions,andwhatfractionofreallocationscouldreduceemissions

despiteincorporatingtransport?

InFigure3aweprovideahistogramof29,300productionreallocations,withunitsingrams

ofCO2perdollartraded.18Themedianreallocationfromtradeincreasesemissionsby123grams

perdollartraded,whilethemeanreallocationincreasesemissionsby554grams.Negative

observationsrepresentareductioninemissionsfromtrade;26.5%ofallpossiblereallocations

reduceemissions,andthesetradepairsaccountforabout31percentofworldtradebyvaluein

2004.

Tounderstandthemechanicsofthisreallocationbetter,weprovideasimilardistribution

fortwoillustrativesectors:wearingapparelandbulkagriculture.Forwearingapparel,thereare

quitesmalldifferencesacrosscountriesinoutputemissions.Thismeansthatrisingtradeacts

primarilytoincreaseemissionsfromtransport.Only15.8%ofproductionreallocationsreduce

emissions,andtheaggregatechangesinemissionsfromtradearequitesmall(mean136).In

contrast,therearelargedifferencesacrosscountriesinoutputemissionsfrombulkagriculture,and

                                                            18Wedropthetopandbottom5%ofvaluestoeliminateoutliersthatdistortthehistogram. 

  25

aswenotedinFigure2,transportisasmallshareoftrade‐relatedemissions.Inthiscase,41.6

percentofproductionreallocationsreduceemissions,andtheaggregatechangeinemissionsfrom

tradeisverylarge(mean764grams).

Table5providesdataforeachcountryandproducingsectorincludingthefractionoftrade

reallocationsthatareGHGemissionreducing,andtheaveragechangeinemissionsfromtrade.

Highincomecountriestendtohavelowoutputemissionsandintensivelyuseairplanesintrade,

andhere,fewtradeexchangesareCO2reducing.Lowincomecountrieshavehighoutputemissions

andintensivelyusemaritimetransport.Here,morethanhalfoftradereallocationsareemission

reducing.

ThesecalculationsaremechanicallyfocusedonlyonGHGemissions,anddonotaddress

whetheranyparticulartradeflowislikelytotakeplace.Assuchtheyaremeanttobeillustrativeof

thecapacityofthetradingsystemtoincreaseordecreaseemissions,butnotthefeasibilityofthe

change.Inthenextsectionweconsidergeneralequilibriumshockstothetradingsysteminorder

toanalyzehowlikelyfuturepatternsoftradegrowthwillaffectemissions.

V. TradeGrowthandChangesinInternationalTransportEmissions

Theemissionintensityofindividualtradeflowsvariesdramaticallydependingonwhatproductis

beingtraded,whichcountriesaretrading,andhowtheyaretransportingit.Asaconsequence,

tradegrowththatalsochangesthecompositionoftradecanresultinpronounceddifferencesin

trade‐relatedemissions.

InthissectionwewilluseaCGEsimulationtogeneratechangesinthevalueand

compositionoftraderesultingfromtariffliberalizationandGDPgrowth.Combiningthiswithour

scalevs.intensitydecompositionwecancalculatetheeffectofgrowingtradeonemissionsgrowth.

Fixingtheemissionintensityofaparticularoutputsectoro‐g,thegrowthinoutputrelated

emissionsis:

  26

(7)

Fixingtheemissionintensityofaparticularo‐d‐gtradeflow,thegrowthoftrade‐relatedemissions

isthen

(8)

Thisexerciseholdsfixedthemodalsharesforeacho‐d‐gflow,andtheemissionintensityofeach

mode.Putanotherway,thisexercisetakesthetransportationsystemasgivenandexamineshow

changesintradeaffectthegreenhousegasemissionsfrominternationaloutputandtransport.We

donotmodelhowchangesinfuelprices,spurredeitherbyrisingdemandforfuelorchangesin

carbon/fueltaxes,affectmode‐specificprices.Nordoweexplicitlyexamineendogenous

technologicalchangeintransportation,althoughwedoexploresensitivityofourresultsto

assumptionsonthefuelandemissionintensityofairtransport.Onecanimagineanadditional

exercise,motivatedbyandmadepossiblebythedataconstructedinthispaper,focusedonthe

effectofcarbontaxationonfuelpricesandthereforemodalchoice,andhowthatwouldfeedback

intochangesintradepatterns.Weleavethisconsiderablymoreinvolvedexerciseforfuturework.

Ourapproachoffixingmodalsharesforeacho‐d‐gflowyieldsareasonableapproximationof

aggregatechangesinmodaluseandemissionsintwocases.One,iftariffliberalizationorGDP

growthdoesnotgeneratelargechangesinrelativetransportationprices(e.g.thepriceofair

relativetooceanshipping),thenwewouldnotexpectmodalshareswithinano‐d‐gflowtochange

much.Thiswouldbethecaseiftherearefewaggregatechangesinmodaluse,oriftradegrowth

doesnotaffectinputcostsdifferentiallyacrossmodes.Two,supposethatmodalusevaries

primarilyacross(ratherthanwithin)o‐d‐gflowsduetoimmutablegeography,infrastructure,and

productcharacteristics.Forexample,land‐adjacentcountrieswillcontinuetomovegoodsviaroad

andrailindependentofoceanshippingpriceswhilecountriesseparatedbyanoceanwillbeunable

touseroadandrail.Similarly,productweightwillforcegrainontobulkcargocarriersregardless

*Y Yog og ogE Y e

*T Todg odg odgE VAL e

  27

ofthepriceofaircargo.Inthesecases,smallchangesovertimeinmodalusewithineacho‐d‐gflow

willbeswampedbychangesinthetradesharesofflowsthatuseonemodemorethananother.19

A. SimulatedTradeGrowth

Wewishtosimulatethechangesinworldwideoutputandtrade( and inequations(7)

and(8)respectively)associatedwithvarioustariffliberalizationandoutputgrowthscenarios,

whichrequirestheuseofacomputablegeneralequilibrium(CGE)modeloftrade.Weemploy

version7oftheGTAPmodel,aggregatingthemodelto40regionsand23tradedand6non‐traded

goods.AhighlydetaileddescriptionofthiswidelyusedmodelcanbefoundinHertelandTsigas

(1997).Webrieflysummarizekeycharacteristicshere.

Withineachsectorfirmsareconstantreturnstoscalewithaproductionstructurethatis

Leontiefinfactorinputs(labor,capital,andland)andintermediateinputsincludingenergy

commodities.SubstitutionbetweenfactorinputsisgovernedbyaCESstructure,asissubstitution

betweenintermediateinputsthatareArmingtondifferentiatedbyorigin.Ontheconsumptionside,

householdshaveCobb‐Douglaspreferencesoverconsumption,governmentspendingandsaving.

DemandsoverconsumptiongoodsemployaCDE(constantdifferenceofelasticities)form,and

householdsregardtheoutputofeachsourcecountryasArmingtondifferentiated.

Tocapturepossibleeffectsoftradeliberalizationweexplorefourscenarios.Therehave

beenawidevarietyofliberalizationproposalsaspartoftheDoharoundoftheWTOtalks.We

choosearepresentativethree,referredtoinMinor(2006)asDohaScenarios4,5,and9,because

theirdesignisclosesttotheproposalscurrentlyunderconsideration.Appendix3containsdetailed

notesonthesescenarios.Insummary,scenarios4and5focusonagriculturalmarketaccessonly

withtariffcutsfordevelopedcountriesrangingfrom40to60percent,andthosefordeveloping

countriesbeingonethirdsmaller.Scenario9accountsforbothagriculturalandnon‐agricultural

marketaccess(NAMA),andherenon‐agriculturaltariffsarecutprogressively,i.e.peaktariffsare                                                            19Wealsoholdfixedthewvratiooftradeforagivenflow,assumingthatsmallchangesovertimeinwvwithinano‐d‐gflowwillbeswampedbychangesinthetradesharesoflightversusheavyflows. 

ogY odgVAL

  28

cutmorethanlowertariffs.Inafinal“fullliberalization”scenario,allimportandexporttariffsand

subsidiesaresettozero.

Tariffliberalizationmayleadtomodestincreasesintrade,butrisingoutputislikelytolead

tomuchmorerapidtradegrowth.Moreover,outputgrowthislikelytobeasymmetricwithsome

developingcountriessuchasChinaandIndiagrowingmuchfasterthandevelopedcountries.To

experimentwithoutputgrowthweuseaspecializedversionoftheGTAPmodelcalledGDyn(or

DynamicGTAP).ThisversionofthemodelcontainsdetailedprojectionsofGDPandfactor

endowmentgrowthratesfrom2004‐2020foreachcountryinthedatabase(Walmsley2006).20

ThismodeltakesbothrealGDPgrowthandfactorinputgrowthasexogenous(valuesshownin

AppendixTableA4),andallowsaHicksneutraltechnologicalchangevariabletoreconcilethese

changeswithothermodelvalues.

Thissimulationallowsustoexaminetwokeypoints.First,predictedGDPgrowthrates

varywidelyacrosscountries,withespeciallyrapidgrowthinChinaandIndia,andslowergrowthin

developedEuropeaneconomies.Second,thisgrowthoccursthroughunevenratesoffactor

accumulation,withsomecountriesrapidlyaccumulatingcapitalandskilledlaborwhileotherssee

relativelyrapidgrowthinunskilledlabor.Thisallowsustomodelchangesinboththescaleofeach

economyandincomparativeadvantagearisingfromchangingfactorsupplies.

B. Results

Table6summarizesthechangesinoutput,exports,modaluse(byvalueandbyKG‐KM),andCO2

emissionsundereachofthefivescenarios.Changesinoutputvalue,outputemissions,andexport

valuescomedirectlyfromtheGTAPmodel.Combiningthesewithourdataontradeweight/value

                                                            20Walmsley2006inturnbuildsGDPandinputgrowthestimatesbasedonGlobalEconomicProspects2005,AhujaandFilmer1995,andCPB1999.GDynexplicitlymodelsthedynamicsofcapitalaccumulation,whichmakesiteasierforthemodelertohitagivenGDPgrowthtarget.Itallowsforinternationalcapitalmobilitysothatclosingthemodelrequiresustoallowinvestmenttovaryendogenouslyinonecountry(wechoseSouthAfrica,givenitsrelativeunimportanceforthemajorissuesathand).TheresultwasanunrealisticallyhighrateofcapitalaccumulationinSouthAfrica.Howeverallresultsarerobusttoincluding/excludingSouthAfrica,exceptforthoseinTable7. 

  29

anddistancewecalculatechangesinexportsbyweightandbytransportationservices.Combining

changesintransportationserviceswithdataonmodaluseandemissionswecalculatechangesin

modaluseandemissions.Forrobustnesswecalculatechangesintransportintensityassuming

bothaHIGHemissionsscenario(aviationemissionsmatchingtheUScargofleet),andaLOW

emissionsscenario(aviationemissionscorrespondingtothemostefficientlongrangeplanes,and

matching2004totalemissionvaluesfromtheITF).

ThethreeDohascenariosarelargelyuninterestingfromatransportandemissions

perspective.Simply,theseliberalizationeffortsaresomodestthattheyyieldlittlegrowthintrade,

intransport,orinemissions.Themostfar‐reachingscenarioyieldsa1.1percentincreaseintrade

(byvalueorKG‐KM),andaslightlyhigher(1.7‐2.1percent)riseintransportemissions.

Thefullliberalizationscenarioeliminatesallimportandexporttariffs.Whilethisisnotcurrently

onthenegotiatingagenda,itisaninterestingexercisebecauseitrevealsanimportantintersection

betweenthestructureofprotectionandemissions.Tariffratesarenotsetuniformlyacrosstrading

partnersandsignificantpreferencesaregiventopartnerswithintradingblocssuchastheEUand

NAFTA.Becausetradingblocstendtobegeographicallyconcentrated,tariffsarelowerformore

proximatepartnersandespeciallyforland‐adjacentpartners.Inourbaseyear,thetrade‐weighted

averagetariffrateforland‐adjacentpartnersis1percent,whiletheaveragetarifffornon‐adjacent

partnersis5.5percent.Thisisanimportantphenomenonfromatransportationperspective

becauserailandroadtransportdominateinternationaltradebetweenland‐adjacentcountries.

Tariffliberalizationthatremovestariffpreferencesforland‐adjacentcountrieswillthenshifttrade

towarddistantpartnersandawayfromroadandrailtransport.

Theseeffectsshowupclearlyinourresults.InTable6weseethatfullliberalization

increasestradeby6percent,concentratedinthoseproducts(agriculture,textilesandwearing

apparel)thataresubjecttothehighestratesofprotection.21Internationaltransportemissionsrise

                                                            21Thesmallnegativeeffectonoutputvalueisduetotermsoftradeeffects.Realquantitiesoftraderise. 

  30

fasterthantrade,dueinparttoariseintradeatadistanceandinparttoanexpansionofemission

intensiveaircargo.AsweseeinTable6,railandroadusageshrinkssubstantiallywhile

internationalaviationandmaritimetransportgrowquickly.

Incontrasttothetariffliberalizationsimulations,theGDPgrowthscenarioyieldsprofoundchanges

inoutput,trade,andgreenhouse‐gasemissions.Outputandtradevaluerisesatsimilarrates,

accumulatingto75‐80percentgrowthoverthisperiod.Trademeasuredbytransportservices(KG‐

KM)risesmuchfaster,6.5percentperannum,accumulatingto173percentgrowth.Not

surprisinglythen,transportemissionsrisefasterthanoutputandtradebyvalue,andfasterthan

outputemissions.

Tounderstandthis,notethattariffliberalizationcreatedtradegrowthbiasedtowardlong

distancetradebecauseoftheerosionofproximity‐basedtariffpreferences.TheGDPgrowth

experimentcreatestradegrowthbiasedtowardlongdistancetradebecausethefastestgrowing

countries(China,India)arefarawayfromotherlargemarkets.Aswithtariffliberalizationthereis

fastergrowthinairandseatransportrelativetorailandroadtransport.

Theseaggregatednumbershideawealthofinterestingvariationwewishtoexplore.Recalling

equation(8),weask:whatistherelationshipbetweentransportemissionintensityinthebase

year,andthesubsequentgrowthintrade?InthetopleftpanelofTable7wegroup30,906o‐d‐g

tradeflowsintoquartilesusingtransportemissionintensity,andassigneacho‐d‐gobservationa

quartiledummyvariable.22Wethenregresstradegrowth(byo‐d‐g)onemissionsquartileswith

theconstantrepresentinggrowthinthelowestemissionquartile.Inboththefullliberalizationand

GDPgrowthscenarios,thehigherthetransportemissionintensityofthetradeflowthefastertrade

grew.ThiseffectwasconsiderablystrongerintheGDPgrowthscenario,bothinthesizeofthe

coefficientsandintheregressionR‐squared.Inthebottomleftpanelweexaminecorrelatesof

                                                            22WealsoomittheGASsectorandincorporatefixedeffectsforSouthAfrica.GASisanoutlierthatskewsresultsbadlybecauseitsweight/valueratioandtransportmodalusearepoorlymeasured.FortechnicalreasonsnotedaboveSouthAfricaistreateddifferentlyinthemodelclosure,whichresultsinunrealisticmeasuresofcapitalgrowth. 

  31

transportemissionintensities.Tradegrowthinbothscenariosisfastestfortradeflowsthatoccur

overlongerdistances,anduseahighershareofaircargo,andinproductswithhigherweight/value

ratios.

ThetoprightpanelofTable7performsasimilarexerciseonoutputemissions.Foreachof

879origin‐productswegroupproductionintoquartilesbasedonoutputemissionintensities,and

regressoutputgrowthonthesequartiles.Fullliberalizationhasverylittleeffectinreorienting

outputgrowthtowardmoreorlessemissionintensiveproduction.However,GDPgrowthorients

outputgrowthtowardthosecountriesandproductswithhighoutputemissions.Thisisprimarily

theeffectofrapidGDPgrowthinChinaandIndia.Becausetheiroutputismoreemissionintensive

(inthefourthquartileofintensities),morerapidGDPgrowthinthosecountrieswillpushoverall

emissionshigher.

VI. ConclusionsandImplications

Mostoftheworkontradeandclimatechangehasignoredinternationaltransportation,or

considereditinthecontextofcasestudies.Thisneglectisdueinparttoalackofdata,andinpart

tothebeliefthatinternationaltransportationrepresentsasmallportionofoverallemissions.

Inthispaperwecombineddataontrade,transportationmodes,transportemissions,andoutput

emissionstocalculatethecontributionoftransportationtotrade‐relatedgreenhousegasemissions

intheaggregateandforalltradeflowsworld‐wide.Whileinternationaltransportationisasmall

fractionofoverallemissionsitisasurprisinglylargefractionoftrade‐relatedemissions.Two‐

thirdsoftrade‐relatedemissionsinUSexportsareduetointernationaltransportation,andworld‐

wideover75percentofthetrade‐relatedemissionsoftransportequipment,electronicequipment,

machinery,andmanufacturesneccomefromtransportation.

Weusedourdatatosystematicallyevaluatewhetherincreasingtradecouldbeemission

reducing.Ifacountryhasveryhighoutputemissions,andtransportsgoodsefficiently,importing

  32

thegoodfromalowemissionproducercanreduceemissions.Wefindthatinonequarterof

possibleproductionreallocations,tradecanreduceemissions.Emissionreducingtradesaremore

likelytooccurinagricultureandminingsectorswhilereducingemissionsthroughtrading

manufacturesisrelativelydifficult.

Thesereallocationsaresimplepartialequilibriumchangesanddonotaddresswhether

suchareallocationwouldbefeasibleorlikely.Toexaminelikelychangeswecombinedourdata

withaseriesoftradegrowthsimulationsdesignedtoilluminatetheroleoftariffliberalizationand

GDPgrowth.Tariffliberalizationundoestariffpreferencesthatfavorproximateandland‐adjacent

partnerswhouserailandroadtransportandmovegoodsshortdistances.Thisresultsinashiftin

tradetowarddistantpartners,amoreintensiveuseofaircargo,andtransportemissionsgrowth

thatismorerapidthantradegrowth.Theshareoftransportintrade‐relatedemissionsrises,

reversingadownwardtrendcreatedbypreferentialtradeagreements.However,thesechangesare

smallrelativetothosecausedbyGDPgrowthinChinaandIndia.Weprojecttransportemissions

risingat5percentayearaseconomicgrowthinthesecountriessignificantlyincreasesthedistance

oftrade.

Aclearimplicationofourcalculationsisthatproductionandtransportationemissions

shouldbeconsideredwhenevaluatingpolicychangesdesignedtocurtailemissions.Many

exportersandproductsthatlookrelatively“clean”whenwefocusonlyonoutputemissionsarein

factheavyemittersonceincorporatingtransportation.Insomecountriestheimpactofmitigation

willbefeltmostacutelyontheproductionside,whereasincountriesliketheUS,themaineffect

willprimarilybeontransport.

Therearealsosignificantimplicationsformechanismdesign,specifically,howtotreatthe

internationaltransportsectorwithintheglobalframeworkforemissions.Doesinternational

transport“belong”totheexporter,totheimporter,orshoulditbetreatedasaseparatelycapped

sector,inessenceacountryuntoitself?GiventheimbalanceintransportemissionstheUSwould

  33

muchpreferanimportbasedallocationratherthananexportbasedallocation,whileEastAsian

countrieswouldprefertheopposite.Weretransporttreatedasaseparatelycapped“country”the

higherrateoftransportservicesgrowth(andthedifferencesingrowthratesacrossmodes)would

yieldpotentiallylargedistortionaryeffectsontradeascapsbindfasterontransportthanonoutput.

Finally,ourtradeandemissionsgrowthcalculationstakethetransportsectorasgivenandassuch

abstractfromimportantsubstitutionmargins.Weassumeawaychangesinmodalusagewithina

particulartradeflowovertime,anddonotallowfortechnologicalchangeinemissionintensities

dueeithertoinnovationortoupdatingthevintageofthetransportationfleetcapitalstock.

Includingtheseadditionalmarginsofresponseisbeyondthescopeofthecurrentstudy,butin

futureworkthiscouldbeusefulforunderstandinginteractionsbetweentrade,transportationand

emissions.Inparticular,themuchhigherfuelintensityofaircargo,anditsassociatedCO2

emissions,suggeststhatclimatemitigationpoliciescouldhavepronouncedeffectsonhowgoods

moveandthekindsofgoodsthatnationstrade.Thisisespeciallyimportantforcountrieslikethe

US,whoserelianceonaircargoresultsinunusuallyhightransportationemissions.

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Appendix1:ModelAggregation

RegionAggregation:Webeginwith113constituentcountries/regionsavailableintheGTAP

database,thenaggregateintothe40“regions”listedinbold.Someregionsaresinglecountriesand

othersareaggregationsofthe87constituentcountriesavailableintheGTAPdatabase.

NorthAmerica:(2regions)Canada,UnitedStates

CentralAmerica:(2regions)Mexico,OtherCentralAmericaandCaribbean(CentralAmerica,

RestofFTAA,RestofCaribbean)

SouthAmerica:(4regions)Argentina,Brazil,Chile,RestofSouthAmerica(Colombia,Peru,

Uruguay,Venezuela,RestofAndeanPact,RestofSouthAmerica)

Europe:(18regions)Austria,Belgium‐Luxemburg,Denmark,Finland,France,Germany,

Greece,Ireland,Italy,Netherlands,Portugal,Spain,Sweden,UnitedKingdom,Russia,Restof

EuropeanUnion(Cyprus,CzechRepublic,Estonia,Hungary,Latvia,Lithuania,Malta,Poland,

Slovakia,Slovenia,Bulgaria,Romania),OtherEurope–EFTA(Switzerland,Iceland,Liechtenstein,

Norway),OtherCEEandOtherCIS(Albania,Croatia,Turkey,RestofFormerSovietUnion)

SouthAsia:(2regions)India,OtherSouthAsia(Bangladesh,SriLanka,Afghanistan,Restof

SouthAsia)

EastAsia(8regions)Japan,Korea,Singapore,Malaysia‐Indonesia,China‐HongHong,

Taiwan,OtherEastAsia(NorthKorea,Macau,Mongolia),OtherSouthEastAsia(Philippines,

Thailand,Vietnam,RestofSoutheastAsia)

MiddleEast/Africa:(3regions)SouthAfrica,MiddleEastandNorthAfrica(MiddleEast,

Morocco,Tunisia,RestofNorthAfrica),Sub‐SaharanAfrica(Botswana,Malawi,Mozambique,

Tanzania,Zambia,Zimbabwe,Madagascar,Uganda,RestofSouthAfricanCustomsUnion,Restof

SouthernAfricanDevelopmentCommunity,RestofSub‐SaharanAfrica)

OceaniaCountries(1region):(Australia,NewZealand,RestofOceania)

SectoralAggregation.GTAPprovidesdataon57sectors.Weaggregatetheseto27sectors,and

focuson23tradablesectorsdescribedinTableA1below.Manufacturingandminingsectorsare

analyzedusingthesamelevelofdetailasintheGTAPdata.Agriculturalsectorsareaggregatedas

follows.

BulkAgriculture(Paddyrice;Wheat;Cerealgrainsnec;Oilseeds;Sugarcane,sugarbeet;Plant‐

basedfibers;Cropsnec);

ProcessedAgriculture(Vegetables,fruit,nuts;Bovinecattle,sheepandgoats,horses;Animal

productsnec;Rawmilk;Wool,silk‐wormcocoons;Bovinemeatproducts;Meatproductsnec;

  37

Vegetableoilsandfats;Dairyproducts;Processedrice;Sugar;Foodproductsnec;Beveragesand

tobaccoproducts);

Appendix2.SourcesofModalDataandCalculationofModalShares

Thetablebelowsummarizesthesourceofmodaldataforworldwidetradeflows.Xindicatesthat

modalsharesaredirectlyobservedfromvariousdatasources,asfollows.Thesedatarepresent

65%ofthevalueofworldtrade.

XaModalsharescalculatedusingEurostatsdataonEuropeanexports.ForflowsfromEU15to

EU25(excludingBulgariaandRomania),modalsharesareoriginallyreportedatthe3digitlevelof

theNSTR.ThesedatawerecompiledonspecialrequestbystatisticiansatEurostats.Weapplythe

mostrecentlyavailableyear,1999.

Xb.ModalsharescalculatedfromEurostatsdataonEuropeanimports.

Xc.ModalsharescalculatedusingUS“ImportsofMerchandise”,USBureauoftheCensus.

Xd.ModalssharescalculatedfromALADItradedata.

Xe.ModalsharescalculatedusingUS“ExportsofMerchandise”,USBureauoftheCensus.

Xf.ModalsharescalculatedusingUS“ExportsandImportsofMerchandise”(USBureauofthe

Census)andfreightflowsdatafromtheNorthAmericanTransborderFreightData.

ImporterExporter

EU US LAC RestofEurope

Canada,Mexico

Asia Africa Other

EU Xa Xa Xd Xa Xa Xa Xa XaUS Xb ‐‐ Xd Xe Xf Xe Xe XeLAC Xb Xc Xd A/O A/O A/O A/O A/ORestofEurope Xb Xc Xd L/A/O A/O A/O A/O A/OCanada,Mexico Xb Xf Xd A/O L/A/O A/O A/O A/OAsia Xb Xc Xd A/O A/O L/A/O A/O A/OAfrica Xb Xc Xd A/O A/O A/O L/A/O A/OOther Xb Xc Xd A/O A/O A/O A/O A/O

Theremainingvaluesareestimated.A/Oindicatesthatlandtransportisnotavailablebetween

regions,andsotradeflowsaresplitbetweenairandocean.L/A/Oindicatesthatland(rail,truck),

air,andoceansharesareimputed.

ModalShareDataImputation:Fortradeflowsrepresenting35percentofworldtrade,nodirect

informationonmodaluseisavailable.Inthesecasesweestimatemodalusebyrelyingonthe

matrixofmodaltradeflowswedohaveandthefollowingfour‐stepalgorithm.

1. Identifytradewherelandtransportisinfeasible.

  38

Ifano‐dcountrypairisnotonthesamecontinent,oradestinationcouldnotreasonablybereached

bylandtransport,railandroadsharesaresettozero.(Thatis,JapanispartofAsia,butlacksaland

bridgesoitsrailandroadsharesarezero.).Ofthe35percentofworldtradenotcoveredbyour

explicitmodalsharedata,33percenthavenoland‐basedtrade.Forthesecases,skiptostepthree.

2. Estimatetheshareoftradethatmovesbyland.

Forthe2percentofworldtradewithoutmodaldata,andwherelandtransportisanoption,we

proceedonacasebycasebasis.ForEuropeancountrypairsnotcoveredexplicitlybytheEUdata,

weestimateamodalsharemodelwithfirsttherailshareoftradeandthentheroadshareasa

dependentvariable.Regressorsincludefixedeffectsfororigin,destination,andGTAPsector,the

distancebetweencountries,adummyforland‐adjacency,andtheweight/valueratioofthe

exporter‐sector.ThesampleemployedistheEUdataforwhichwedohavemodalinformation–

recallthatalltheEU27countriesreporttheirimportsfromallEuropeancountriesandtheir

exportstoallEuropeancountries.Wethenuseoutofsamplepredictiontogeneratemodalsplits

fortheremainingcountries.Thisallowsustoestimate,forexample,theshareofrailinRussian

exportsofcoalbycalculatingRussia’sconditionalaverageshareofrailtotheEU27countries(the

originfixedeffect),theweight/valueofRussiancoal,andthedistancetoeachmarket.

Thisleavesintra‐continentaltradewithinAfricaandland‐adjacentAsiancountries,roughly1.8

percentofworldtradebyvalue.ForAsiaweusecalculationsbyPrabirDe(2007)thatreportthe

modalsharesofIndiantradewithitsland‐adjacentneighbors,summedoverallproductsand

partners.Thesesharesdonotvaryoversectors.Forintra‐Africantrade(avanishinglysmallshare

ofworldtrade)wecouldfindnodataonmodalsharesandsoimposedroadsharesof75percent

andrailsharesof0.

3. Splitthe(air+ocean)share

Recallthatinalmostallcases(33percentofthe35percentoftradewithnodata),theocean+air

shareis100%.Intheremaining2percentofcaseswesplitairv.oceanforthetradethatisleftover

aftersubtractingoffthesharesoftradegoingtorailandroadtransport.

Weestimateamodelwherethedependentvariableistheratioofair/oceanandtheregressors

includetheweight/valueratiooftheexporter‐product,distancebetweenmarkets,whetherthey

areland‐adjacentandvectorsoffixedeffectsbyorigin,destination,andGTAPsector.Theseorigin

anddestinationfixedeffectscaptureallmarketcharacteristicssuchaslevelofdevelopment,and

qualityandcompositionofinfrastructurethatstronglyaffectthismodalsplit.Theproductfixed

effectsabsorbfactorsthatexplainmodalusesuchasbulk,spoilage,theneedforspecialpacking,

andtimelydelivery.Again,theestimationsampleincludestheEU,US,andALADIdataforwhichwe

  39

haveexplicitmodalsharedataandweuseoutofsamplepredictiontogeneratemodalsplitsforthe

remainingcountries.ThehighR2intheseregressions(0.75)suggeststhatthemodeldoesagood

jobofidentifyingsharevariation.

Appendix3:SimulatingTradeGrowth:TariffLiberalizationScenarios

Tocapturepossibleeffectsoftradeliberalizationweexplorefourscenarios.Threeoftheseare

“likely”tariffcutsundercurrentDoharoundnegotiations.Thefourthisafullliberalization

scenarioinwhichallimportandexporttariffsandsubsidiesaresettozero.

TherehavebeenawidevarietyofliberalizationproposalsaspartoftheDoharound.Tenofthese

proposalshavebeenmodeledbyCEPIIandincorporatedintotheGTAPmodel.Therearesubtle

differencesacrosstheseproposals,sowechoosearepresentativethree,referredtoinMinor(2006)

asDohaScenarios4,5,and9.Scenarios4and5focusonagriculturalmarketaccessonly,while

scenario9accountsforbothagriculturalandnon‐agriculturalmarketaccess(NAMA).These

scenariosarechosenbecausetheirdesignisclosesttotheproposalscurrentlyunderconsideration.

Scenario4and5arebothbasedontheHarbinsonproposal,whichconsistsofapplying

proportionaltariffcutsonfourtiersoftariffranges.Tariffrangesandcutsineachtiervarybetween

developinganddevelopedcountries.ThetablebelowistakenfromMinor(2006)andshowsthe

Harbinsontieredtariffcuttingformulaforagricultureinscenario4.Thetariffcutsarehighestfor

developedcountriesrangingfrom40to60percent.Developingcountriestariffcutsineachtierare

abouttwothirdsthoseinthecorrespondingtiersofdevelopedcountries.

Scenario5isthesameasscenario4butallowscountriestoavoidtheapplicationofthetariffcuts

on2%ofsensitiveproducts.Inpractice,thechosenexceptionsareconcentratedin‘processed

agriculture’.Scenario9addsnon‐agriculturalmarketaccess.23Thenon‐agriculturaltariffcutsare

                                                            23TheagriculturalmarketaccessunderlyingthisscenarioassumesinsteadoftheHarbinsonformulaaharmonizingformula. 

Tier DevelopedCountries DevelopingCountries

TariffRate

Range(%)

Cut(%) TariffRate

Range(%)

Cut(%)

1 <15 40 <20 25

2 15‐90 50 20‐60 30

3 >90 60 60‐120 35

4 ‐‐ ‐‐ >120 40

  40

non‐proportional,sothatpeaktariffsarereducedmorethanlowertariffs.Non‐lineartariffcuts

formulasareusuallyreferredasSwiss‐type.WhiletheadoptionofSwiss‐typeformulaonnon‐

agriculturalproductsisagreedamongnegotiatorstheexacttypeisnot.Ourscenarioassumesthe

Girard(WTO03‐4322)formula:

WhereT1isthenewboundtariffrate,Bisthecoefficienttobedeterminedforreductions,T0isthe

baseboundrate,andTaistheaverageofbaseboundratesforNAMAproducts.Bisequalto1for

developedcountriesand2fordevelopingcountries.

01

0

a

a

B T TT

B T T

  41

Note.EmissionsintensitiesareexpressedingramsofCO2perdollar.

Figure1.DistributionofEmissionIntensities 

 

  42

 

Note.EmissionsintensitiesareexpressedingramsofCO2perdollar.Figure2:TheContributionofTransporttoTotalTrade‐RelatedEmissions

  43

Note:26.5%ofallorigin‐destination‐sectortradeflowsleadtoareductionintotalCO2emission(outputandtransportemissionscombined).EmissionintensitiesareexpressedingramsofCO2perdollar

Figure3a:NetChangeinCO2EmissionsduetoTrade

Note.EmissionintensitiesareexpressedingramsofCO2perdollar.

Figure3b:NetChangeinCO2EmissionsforSelectedSectors

  44

     

                       

Table1.WorldOutputandTransportEmissions,1990‐2004(selectedyears)

1990 1995 2000 2004

CO2Emissions(miltonsCo2)

Fuelcombustion,allsources1 21024 21808 23487 26320

TotalTransport1 4614 5047 5678 6202

InternationalTransport(aviation,maritime)2 649 710 829 910

InternationalTransportEmissions

ShareofTotalEmissions 3.1% 3.3% 3.5% 3.5%

ShareofTransportEmissions 14.1% 14.1% 14.6% 14.7%

CO2equivalentgramsperDollarofExports 158.8 129.6 104.0 93.3

Note.1Source:InternationalEnergyAgency.2Internationaltransportincludesinternationalmaritimeandaviationtransportmodes.Datasource:InternationalTransportForum

  45

  

Table2.RegionalModalShares,bytradevalueandKG‐KM

Panel(A)Modalsharesbyimporter

ByValue ByKG‐KM

Sea Air Rail Road Sea Air Rail RoadNorthAmerica 46.6 21.0 6.7 25.7 91.8 1.4 1.4 5.5CentralAmerica 78.8 16.3 0.3 4.6 97.9 0.6 0.1 1.4SouthAmerica 66.4 22.7 0.3 10.6 96.0 1.3 0.2 2.6Europe 35.5 13.0 4.5 46.9 91.7 1.1 2.0 5.2SouthAsia 74.8 21.7 0.6 2.9 99.2 0.5 0.1 0.3EastAsia 72.8 25.8 0.2 1.2 98.8 1.1 0.0 0.1MiddleEast/Africa 68.2 19.1 0.0 12.7 88.5 0.9 0.0 10.6Oceania 78.0 22.0 0.0 0.0 98.1 1.9 0.0 0.0WORLD 50.2 18.4 3.5 27.8 95.0 1.1 0.8 3.1

Panel(B)ModalsharesbyexporterNorthAmerica 28.3 25.9 9.4 36.4 88.2 4.6 1.4 5.8CentralAmerica 74.0 20.6 0.4 5.0 97.0 0.9 0.2 2.0SouthAmerica 85.7 7.3 0.2 6.8 99.1 0.2 0.0 0.6Europe 35.1 13.0 4.5 47.3 89.3 0.9 2.8 7.1SouthAsia 73.9 21.6 0.8 3.7 97.8 1.0 0.2 1.0EastAsia 72.0 26.8 0.2 1.0 98.8 0.9 0.0 0.2MiddleEast/Africa 80.6 9.3 0.0 10.1 97.3 0.1 0.0 2.6Oceania 89.8 10.2 0.0 0.0 99.9 0.1 0.0 0.0WORLD 50.2 18.4 3.5 27.8 95.0 1.1 0.8 3.1

                    

  46

 Table3:EmissionsperTonnes‐KmofTransportServices,byModePanel(A)MaritimeModeShipType CO2per

tonnes‐km

GTAPSectors Source

Bulk 4.5 Bulkagriculture,forestry,minerals,coalproducts

UniversityofAthens,2008

Container 12.1 Processedagriculture,fishing,textiles,wearingapparel,leatherproducts,woodproducts,paperproductsandpublishing,ferrousmetals,metalsnec,metalproducts,motorvehiclesandparts,transportequipmentnec,electronicequipment,machineryandequipment,manufacturesnec

UniversityofAthens,2008

OilTanker 5 Oil UniversityofAthens,2008LNG 16.3 Gas UniversityofAthens,2008LPG 12.7 Petroleum UniversityofAthens,2008Chemical 10.1 Chemicalproducts UniversityofAthens,2008

Panel(B)LandModeModeType

CO2pertonnes‐km

Source

Road 119.7 GiannouliandMellios,EEA,2005

Rail 22.7

Panel(C)AirModePlaneType

CO2pertonnes‐km

Source

Boeing747

552 MaerskLine,2007

Various 476‐1020 CaliforniaClimateChange2006

USCargoFleet

963.45 Authors’calculationsbasedonATAfuelusagedata

USCargoFleet

912 Authors’calculationsbasedonAircraftEconomics1999data

           

  47

 

Table4.OutputandTransportEmissionSharesandIntensities,byRegion

EmissionShares(%ofWorld) EmissionIntensities(CO2g/$) Exports Imports Transport Output Total Output* Transport Total Output* Transport

Importer Exporter Grams Share% Grams Share%

NorthAmerica 20.1 35.2 15.9 606 270 336 55% 395 259 136 34%

CentralAmerica 0.9 0.7 0.8 557 404 153 27% 510 376 135 26%

SouthAmerica 3.8 6.9 9.4 1476 1138 337 23% 760 474 286 38%

Europe 31.1 25.4 19.4 262 179 83 32% 355 253 101 29%

SouthAsia 2.0 0.9 7.0 674 581 93 14% 731 562 169 23%

EastAsia 31.4 15.0 31.1 306 224 81 26% 562 352 210 37%MiddleEast/Africa 8.6 13.1 14.5 1176 908 268 23% 697 476 221 32%

Oceania 2.0 2.8 1.9 1008 701 307 30% 440 245 194 44%

WORLD 100 100 100 445 300 146 33% 445 300 145 33%

SelectedCountries

UnitedStates 10.7 32.5 12.0 739 251 488 66% 366 271 94 26%

China 6.7 3.5 20.8 426 363 63 15% 430 293 138 32%

India 1.5 0.6 4.9 707 612 95 13% 698 516 182 26%Note.Totalemissionsperdollararecalculatedasthesumoftransportandoutputemissionintensities.*Forcomparabilitywithtransportemissions,outputemissionsareconstructedasaweightedaverageofsectorleveloutputemissions,usingtraderatherthanoutputweights.

    

  48

Table5:LikelihoodofCO2ReductionsthroughInternationalTrade

ByImporter Fraction(%)

BySector Fraction(%)

Singapore 6.2 Leatherproducts 12.7Japan 7.0 Woodproducts 12.8Sweden 9.0 Wearingapparel 15.8Denmark 10.1 Motorvehiclesandparts 16.6France 10.8 Forestry 17.8Germany 11.0 Textiles 20.3Portugal 12.5 Petroleum,coalproducts 21.1Austria 12.6 Metalproducts 22.4Italy 13.9 Paperproducts,publishing 24.1RestofEuropeanCountries 14.6 Machineryandequipmentnec 24.9UnitedKingdom 15.3 Transportequipmentnec 26.8Finland 17.0 Minerals 27.0Oceaniacountries 17.0 Manufacturesnec 29.8Belgium 18.3 Fishing 30.3Korea 18.8 Oil 33.6Netherlands 19.1 Ferrousmetals 36.3Mexico 19.6 Mineralproductsnec 37.2Spain 21.2 Gas 37.4Ireland 21.7 Electronicequipment 39.2Taiwan 22.5 Metalsnec 40.1Greece 24.1 Chemical,rubber,plasticproducts 40.7Brazil 24.7 BulkAgriculture 41.6UnitedStates 25.1 ProcessedAgriculture 42.7CentralandCaribbeanAmericas 26.1 EuropeanUnion 29.3 Canada 30.0 SouthAfrica 31.0 India 35.9 RestofSouthEastAsia 37.6 SubSaharanAfrica 40.5 MalaysiaandIndonesia 43.7 SouthandOtherAmericas 43.9 Argentina 45.2 Chile 46.6 Russia 49.6 RestofSouthAsia 51.3 ChinaandHongKong 52.8 MiddleEasternandNorthAfrica 64.6 OtherEastEurope 64.7 RestofEastAsia 67.3 Average 26.5 Average 26.5

  49

Table6.WorldwideChangesinOutput,TradeandAssociatedEmissionsbyScenario

Full GDPgrowth2004‐2020 DohaS04 DohaS05 DohaS09 Liberalization PerAnnum Cummulative

%Change Output ‐0.09 ‐0.04 ‐0.22 ‐1.22 3.57 75.2Exports:

Value 0.07 ‐0.13 1.12 6.09 3.76 80.4Weight 0.24 ‐0.08 0.57 5.72 5.83 147.8Kg‐Km 0.46 ‐0.06 1.10 6.05 6.48 173.3

ModalUse(value) Sea 0.54 0.03 2.70 12.25 4.52 102.8Air ‐0.31 ‐0.34 1.78 7.41 3.82 82.1Rail ‐0.23 ‐0.23 ‐1.20 ‐3.72 2.88 57.6Road ‐0.50 ‐0.27 ‐1.85 ‐4.66 2.21 41.8

ModalUse(KG‐KM) Sea 0.51 ‐0.04 1.16 6.32 6.59 177.5Air ‐0.48 ‐0.44 3.60 13.14 4.93 116.1Rail ‐0.33 ‐0.60 ‐0.63 5.21 4.82 112.5Road ‐0.52 ‐0.27 ‐1.33 ‐4.73 3.69 78.7

CO2Emissions(%change) Output 0.84 0.42 0.92 0.41 4.50 102.2Transport:

HIGHScenario ‐0.06 ‐0.22 2.10 8.63 5.10 121.7LOWScenario 0.04 ‐0.16 1.72 7.51 5.14 123.1

    

  50

Table7.Tradevalueandoutputgrowthbyemissionintensity:WLSestimatesDependentVariable: TradeGrowth OutputGrowth Full GDPgrowth Full GDPgrowth

Liberalization Liberalization

Panel(A)Onquartilesoftransportemissionintensity OnquartilesofoutputemissionintensityIIquartile 0.036*** 0.093*** ‐0.016 0.085 [0.013] [0.025] [0.015] [0.062]IIIquartile 0.040*** 0.229*** 0.006 0.094** [0.012] [0.029] [0.009] [0.043]IVquartile 0.049*** 0.417*** 0.010 0.314*** [0.012] [0.032] [0.012] [0.049]Constant ‐0.001 0.361*** ‐0.015*** 0.403*** [0.006] [0.015] [0.006] [0.028]N 34,162 34,162 879 879R2 0.007 0.570 0.012 0.195

Panel(B)Ontransportemissionintensitydeterminants Distance 0.035*** 0.055*** [0.005] [0.009] Weight/Value 0.019*** 0.090*** [0.004] [0.008] airuse 0.010*** 0.008** [0.002] [0.004] Constant ‐0.182*** 0.149* [0.046] [0.086] N 30,906 30,906 R2 0.051 0.602

Note.Robuststandarderrorsinparentheses.***P<0.01,**P<0.05,*P<0.1.Inpanel(A)quartilesarebasedonthedistributionof(log)emissionintensity.Atradeflow'semissionintensityiscalculatedusingtheLOWscenarioemissionscontent.AllcoefficientsareestimatesbyWLSusing2004exportvaluesasweights.AllregressionsincludeunreportedindicatorvariablesforimportsandexportsinvolvingSouthAfrica.ThisisdoneinordertoaccountforthefactthatintheGTAPGDPgrowthsimulationSouthAfricaisusedinclosingthemodel.TheGassectorisahugeoutlierandsoitisremovedfromthesample.

            

  51

AppendixTableA1.BaselineDescriptivesbyCommodity

Commodity Tariff Weight/Value Shareof:

WorldOutput

TradeValue

Kg‐Km

BulkAgriculture 8.98 3.56 2.51 1.40 4.69

ProcessedAgriculture 9.68 1.24 16.39 6.69 5.54

Forestry 1.13 8.87 0.55 0.16 0.74

Fishing 3.37 0.35 0.51 0.17 0.03

Minerals 1.56 16.56 1.63 1.61 26.53

Oil 1.22 5.01 2.86 5.86 23.69

Gas 0.09 6.33 0.61 0.87 3.52

Textiles 6.91 0.38 2.88 3.20 0.72

Wearingapparel 7.69 0.07 2.14 2.36 0.12

Leatherproducts 7.37 0.21 0.82 1.24 0.19

Woodproducts 1.66 1.21 2.35 2.04 1.21

Paperproducts,publishing 1.64 1.41 5.05 2.34 1.97

Petroleum,coalproducts 3.25 5.13 4.72 2.43 8.27

Chemical,rubber,plasticproducts 2.57 0.90 12.22 14.22 8.15

Mineralproductsnec 3.71 2.48 2.66 1.28 1.95

Ferrousmetals 2.46 2.43 3.69 3.01 4.74

Metalsnec 2.11 0.63 2.14 3.00 1.31

Metalproducts 3.03 0.90 4.20 2.33 1.21

Motorvehiclesandparts 3.45 0.19 7.82 10.48 0.98

Transportequipmentnec 2.01 0.11 2.18 3.10 0.26

Electronicequipment 1.14 0.08 7.78 13.36 1.01

Machineryandequipmentnec 2.58 0.23 11.66 16.66 2.88

Manufacturesnec 2.57 0.19 2.64 2.20 0.31

TOTAL 3.21 1.31 100 100 100

             

  52

 

AppendixTableA2.SectoralModalShares,bytradevalueandKG‐KMCommodity ByValue ByKG‐KM Sea Air Rail Road Sea Air Rail Road BulkAgriculture 76.95 3.18 2.87 16.95 97.02 0.35 1.28 1.36ProcessedAgriculture 56.42 2.77 1.98 38.68 91.77 0.54 0.84 6.86Forestry 67.76 2.41 7.88 21.83 92.21 0.52 3.60 3.67Fishing 41.73 25.78 0.40 32.05 71.02 19.51 0.11 9.36Minerals 71.70 20.38 2.82 5.07 98.48 0.08 0.65 0.79Oil 96.45 0.00 1.16 2.39 98.41 0.00 0.31 1.28Gas 62.12 0.00 13.37 24.50 96.00 0.00 1.10 2.90Textiles 58.19 9.08 0.61 32.07 80.96 4.82 0.13 14.08Wearingapparel 52.56 17.93 0.58 28.88 76.03 16.23 0.11 7.63Leatherproducts 56.85 14.43 0.31 28.37 81.85 8.68 0.12 9.35Woodproducts 50.86 2.05 8.75 38.25 87.74 0.47 2.71 9.08Paperproducts,publishing 47.01 5.00 5.80 42.11 89.92 0.95 1.57 7.56Petroleum,coalproducts 89.07 0.24 2.97 7.37 97.43 0.12 0.68 1.77Chemical,rubber,plasticproducts 45.96 16.44 2.42 35.08 91.35 1.11 1.11 6.44Mineralproductsnec 49.27 7.94 2.25 40.41 90.66 0.65 1.26 7.43Ferrousmetals 65.15 1.36 7.08 26.14 94.36 0.17 1.66 3.81Metalsnec 57.56 13.23 3.09 26.03 93.93 0.89 0.73 4.45Metalproducts 43.65 10.16 2.08 44.03 77.43 7.32 0.41 14.85Motorvehiclesandparts 44.81 3.42 12.95 38.66 81.58 4.34 2.53 11.54Transportequipmentnec 34.04 43.52 3.35 19.03 86.02 9.86 0.92 3.20Electronicequipment 32.78 50.21 0.58 16.38 68.19 28.61 0.07 3.13Machineryandequipmentnec 41.79 25.34 2.31 30.52 81.66 11.42 0.35 6.57Manufacturesnec 36.45 42.82 0.61 20.07 86.76 8.95 0.16 4.13TOTAL 50.25 18.36 3.50 27.81 95.05 1.10 0.78 3.06

  53

AppendixTableA3.OutputandTransportEmissionSharesandIntensities,byCountry EmissionShares

(%ofWorld)

EmissionIntensities(CO2g/$)ByExporter

EmissionIntensities(CO2g/$)ByImporter

Transport Output Total Output* Transport Total Output* Transport Importer Exporter Grams Share Grams ShareArgentina 0.56 1.20 1.47 2351 1924 427 18.2 621 282 339 54.6Austria 0.71 0.62 0.18 160 82 79 49.1 227 142 85 37.6Belgium 1.41 1.45 0.31 176 103 73 41.4 292 230 63 21.4Brazil 1.40 3.17 4.53 1477 1103 374 25.3 766 487 279 36.4Canada 3.52 1.54 2.08 429 363 66 15.4 368 205 163 44.4ChinaandHongKong 6.73 3.45 20.85 426 363 63 14.8 430 293 138 32.0Chile 0.79 0.64 0.29 639 391 247 38.7 945 503 442 46.8CentralandCaribbeanAmericas 0.92 0.70 0.85 557 404 153 27.5 510 376 135 26.4

Denmark 0.59 1.02 0.16 309 123 186 60.1 313 193 119 38.2EuropeanUnion 2.30 2.10 1.91 264 169 95 36.0 333 242 91 27.4RestofEastAsia 0.08 0.26 0.76 2183 1679 505 23.1 700 546 154 22.0Finland 0.45 0.24 0.17 152 103 49 32.2 352 248 104 29.5France 2.82 2.39 1.56 185 112 73 39.4 291 209 82 28.3Germany 5.82 3.61 1.62 115 61 54 46.9 327 217 109 33.5Greece 0.48 0.36 0.23 497 253 244 49.1 370 260 110 29.8India 1.54 0.64 4.90 707 612 95 13.4 698 516 182 26.1Ireland 0.54 0.17 0.20 104 86 18 17.5 252 153 99 39.3Italy 2.85 1.89 1.13 155 84 71 46.0 391 285 105 27.0Japan 10.40 1.97 2.35 105 63 42 40.3 761 457 305 40.0Korea 4.11 2.94 0.90 244 108 136 55.6 650 410 240 37.0MiddleEasternandNorthAfrica 4.27 9.24 7.37 1068 808 259 24.3 606 449 156 25.8

  54

AppendixTableA3.(cont’d)OutputandTransportEmissionSharesandIntensities,byCountry EmissionShares

(%ofWorld)

EmissionIntensities(CO2g/$)ByExporter

EmissionIntensities(CO2g/$)ByImporter

Transport Output Total Output* Transport Total Output* Transport Importer Exporter Grams Share Grams Share Mexico 5.92 1.13 1.78 288 211 76 26.6 674 245 429 63.6MalaysiaandIndonesia 2.48 3.90 2.52 545 333 212 38.9 522 319 203 38.8Netherlands 1.41 1.70 0.69 348 226 122 35.0 456 348 108 23.6Oceaniacountries 2.02 2.77 1.87 1008 701 307 30.4 440 245 194 44.2OtherEastEurope 2.15 2.73 4.34 1156 949 207 17.9 626 497 130 20.7RestofEuropeanCountries 1.34 0.93 0.49 213 158 55 25.8 281 181 99 35.4Portugal 0.40 0.26 0.15 172 88 83 48.6 354 266 87 24.7RestofSouthEastAsia 2.16 1.33 3.12 525 442 84 15.9 503 348 155 30.8RestofSouthAsia 0.50 0.22 2.10 583 496 88 15.0 808 670 138 17.1Russia 0.90 1.91 3.93 1177 1014 163 13.8 570 451 119 20.9Singapore 2.40 0.49 0.03 78 28 50 63.9 492 259 233 47.3SouthAfrica 2.42 1.62 1.03 985 618 367 37.2 1019 403 616 60.4Spain 2.02 1.41 0.97 231 133 98 42.3 391 290 102 26.0Sweden 1.17 1.17 0.17 173 51 122 70.6 315 160 155 49.2SubSaharanAfrica 1.92 2.27 6.14 1699 1447 252 14.8 856 608 248 29.0SouthandOtherAmericas 1.00 1.93 3.08 1430 1142 288 20.2 732 518 215 29.3Taiwan 3.09 0.70 0.57 158 117 41 26.0 564 324 240 42.6UnitedKingdom 3.78 1.38 1.16 169 112 57 33.6 341 234 106 31.2UnitedStates 10.65 32.53 12.03 739 251 488 66.0 366 271 94 25.8TOTAL 100.00 100.00 100.00 445 300 146 32.70 445 300 146 32.70

Note.Totalemissionsperdollararecalculatedasthesumoftransportandoutputemissionintensities.*Forcomparabilitywithtransportemissions,outputemissionsareconstructedasaweightedaverageofsectorleveloutputemissions,usingtraderatherthanoutputweights.

  55

 

AppendixTableA4.ProjectedGDPGrowth GDPin2004 ProjectedGrowth,2004‐2020,%

Country/Region (billionUSD)

GDP Capital UnskilledLabor SkilledLabor

Argentina 150 73.3 48.3 24.5 146.2

Austria 292 47.6 51.0 15.1 3.2

Belgium 384 41.8 58.0 2.6 ‐8.0

Brazil 617 76.4 68.0 13.1 61.9

Canada 979 51.1 68.1 28.4 15.5

CentralAmericaandCaribbean 287 69.9 85.8 33.5 76.4

Chile 90 96.5 128.2 51.6 132.9

ChinaandHongKong 1,837 174.2 266.0 14.1 87.1

Denmark 244 41.0 58.1 7.8 ‐3.3

EastAsia 26 63.6 68.3 25.4 35.9

RestofEuropeanUnion 680 73.6 73.2 ‐14.9 ‐7.8

Finland 186 60.2 50.5 8.7 ‐2.6

France 2,046 44.1 52.5 16.9 4.8

Germany 2,741 33.3 36.1 8.0 ‐3.2

Greece 205 47.3 72.8 15.1 3.2

India 641 139.1 161.5 28.3 88.8

Ireland 182 102.3 135.6 46.6 31.4

Italy 1,678 41.6 42.6 ‐0.7 ‐10.9

Japan 4,659 30.6 49.3 2.9 ‐10.5

Korea 676 109.0 118.6 35.8 147.7

MalaysiaandIndonesia 370 130.5 127.5 47.2 174.4

Mexico 683 81.5 69.5 51.5 106.7

MiddleEasternandNorthAfrica 1,116 89.0 92.4 34.4 62.5

Netherlands 579 51.5 52.8 16.6 4.6

Oceaniacountries 756 72.5 83.8 31.5 13.2

OtherEastEurope 553 89.2 82.3 12.9 41.7

Portugal 168 47.2 77.8 9.4 ‐1.9

RestofEuropeanCountries 623 39.9 35.9 21.7 9.1

RestofSouthAsia 185 120.1 122.8 40.4 79.8

RestofSouthEastAsia 310 92.7 88.2 21.0 76.1

Russia 570 67.6 73.2 ‐1.6 6.6

Singapore 107 116.5 131.4 10.5 19.8

SouthAfrica 214 69.0 675.8 26.2 36.7

SouthandOtherAmericas 339 62.9 59.9 21.8 81.0

Spain 1,040 56.6 84.0 17.4 5.3

SubSaharanAfrica 310 77.1 85.9 51.6 72.5

Sweden 346 49.0 48.5 14.3 2.4

Taiwan 305 89.1 118.5 1.2 9.7

UnitedKingdom 2,124 41.9 48.9 17.5 5.3

UnitedStates 11,673 66.8 86.8 26.9 14.1WORLD 40,970 64.6 83.3 18.7 21.8