OECD Science, Technology and Industry Working Papers
The OECD Directorate for Science, Technology and Innovation (STI) leads OECD research on the contribution of science, technology and industry to well-being and economic growth. STI Working Papers cover a broad range of topics including definition and measurement of science and technology indicators, global value chains, and research on policies to promote innovation. These technical or analytical working papers are prepared by staff or outside consultants to share early insights and elicit feedback.
- ISSN: 18151965 (online)
- https://doi.org/10.1787/18151965
The Measurement of CO2 Embodiments in International Trade
Evidence from the Harmonised Input-Output and Bilateral Trade Database
Efforts to reduce greenhouse gas (GHG) emissions which are linked to the global climate system such as the Kyoto Protocol might fail, if emission-restricted states relocate their carbon-intensive production
activities to non-restricted countries where the primary production factors depend on more GHG-intensive sources. Such a relocation process and increased ‘carbon trade’ appear to be contrary to the GHG
reductions envisioned in international agreements. This study addresses the issue of carbon embodiments
in trade using internationally-comparable OECD data sources (Input-Output, Bilateral Goods Trade and
CO2 emissions) for 41 countries/regions by 17 industries. Simulation results under base case scenarios for
the mid-1990s and the early 2000s suggest that “trade deficits” of CO2 emissions are observed in 21 OECD
countries in the early 2000s and that for 16 countries, the magnitude of the trade deficit increased in the
late 1990s. While a third (860 Mt CO2) of the global increase in production-based emissions took place
within the non-OECD economies in the late 1990s, more than half of the consumption-based emission
(1550 Mt CO2) is still attributable to OECD consumption. The sensitivity simulations imply that an
increase in global trade intensity has an increasing impact on embodied emissions while technology
transfers from carbon-intensive countries to high carbon-intensive countries reduce global emissions and
carbon trade gaps.
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