Energy and greenhouse gas embodied in trade-implications for future climate negotiations
In order to achieve equitable reduction targets, international trade has to be taken into account when assessing nations' responsibility for abating climate change.
The embodiment of energy and greenhouse gases in internationally traded commodities can have a considerable influence on national energy consumption and greenhouse gas emissions. Export of commodities increases domestic energy consumption and greenhouse gas emissions, while the opposite holds for imports. From a policy point of view, an analysis of cross-border characteristics of greenhouse gases embodied in traded commodities is extremely relevant as countries may face future emission reductions targets which allow for consumer responsibility by including embodiments in trade. The aim of the project is to establish whether and where overall reductions in energy consumption and greenhouse gas emissions are possible through a re-structuring of Danish foreign trade. We will develop the methodology used in previous AKF-studies by introducing a multi-region input-output model to calculate the amount of energy and greenhouse gases embodied in a value unit of commodities produced for Danish final consumption. The project will result in (1) an improved methodology for assessing national greenhouse gas responsibilities, (2) in improved Danish trade balances in terms of energy and greenhouse gases, and (3) in an analysis of the opportunities for trade re-structuring in order to minimise overall environmental burden
Especially for open economies such as Denmark, greenhouse gases embodied in internationally traded commodities can have a considerable influence on the national 'greenhouse gas responsibility'. We set up a five-region input-output model including Denmark, Germany, Sweden and Norway in order to calculate CO2 multipliers and trade balances. We investigate multidirectional feedback between these countries, and hence the error inherent in a single-region input-output model. We also examine the effect of aggregation on the model results. In the case of Denmark, an 11 Mt CO2 trade surplus resulting from a single-region model turns into balance when multidirectional trade is considered. Moreover, aggregated models are likely to result in significant errors. Therefore, both the type and the degree of aggregation used for modelling CO2 responsibilities could have a major bearing in international negotiations
Key figures
Category
Participants
| Partner | Subsidy | Auto financing |
|---|---|---|
| Danmarks Statistik. | 0,43 mio. DKK |
Contact
Nyropsgade 37
DK-1602 København V, Denmark
Munksgaard, Jesper , 33110300, akf@akf.dk
Øvr. Partnere: University of Sydney (AU); Danmarks Statistik
