Measuring emissions avoided by international trade: Accounting for price differences

Abstract: 

Net Emissions Avoided by trade (NEA) are the difference between the pollution that would have been produced in a country if it had not exported any products and all the imports required to satisfy its domestic demand had been produced internally, and its actual emissions. The Domestic Technology Assumption (DTA) applied to an Input?Output model is the appropriate method to estimate the NEA. The usual implementation of the DTA involves that the country analyzed should produce a quantity of products equivalent to the monetary value of the imports required to satisfy its final demand (i.e. `monetary DTA?). However, due to price differences, the same physical quantity of goods in different countries could have a different monetary value and the estimation of the NEAwould be biased.We show that a `physical DTA?, focused on the pollution to produce domestically the importsmeasured in physical units, would be a better approach.We have applied both methodologies to analyze greenhouse gas emissions in Spain 1995?2007. Both methodologies show that Spain is avoiding emissions through trade. However, the NEA increases up to three times when applying the `physical DTA?, showing that results from the `monetary DTA? are biased by price differences.

Authors
Authors: 
SERRANO Monica, ARTO OLAIZOLA Ignacio, ROCA Jordi
Publication Year
Publication Year: 
2014
Type

Type:

Appears in Collections
Appears in Collections: 
Institute for Prospective Technological Studies
Science Areas
JRC Institutes
Publisher
Publisher: 
ELSEVIER SCIENCE BV
ISSN
ISSN: 
0921-8009
Citation
Citation: 
ECOLOGICAL ECONOMICS p. 93-100 vol. 97