the carbon content of austrian trade flows in the european and international trade context
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The Carbon Content of Austrian Trade Flows in the European and International Trade Context. Birgit Bednar-Friedl, Pablo Munoz Jaramillo, Thomas Schinko, Karl W. Steininger Wegener Center for Climate and Global Change and Department of Economics, University of Graz, Austria - PowerPoint PPT PresentationTRANSCRIPT
The Carbon Content of Austrian Trade Flows in the European and International Trade Context
Birgit Bednar-Friedl, Pablo Munoz Jaramillo, Thomas Schinko, Karl W. Steininger
Wegener Center for Climate and Global Change and Department of Economics, University of Graz, Austria
FIW, Vienna, April 8th, 2010
The Carbon Content of Austrian Trade
Outline
• Accounting principles in GHG emissions
• Recent and current carbon content of Austrian trade (MRIO)◦ Mulit-regional Input Output Analysis◦ Results for 1997 and 2004
• Future development of carbon content in trade (CGE)◦ Multi-regional Computable General Equilibrium model◦ Climate policy scenarios◦ Results
• The economic and carbon effects for Austria• The economic and carbon effects on a global scale
• Conclusions
The Carbon Content of Austrian Trade
Recent and current carbon content of Austrian trade
Objectives
a) Estimate consumption based CO2 emissions for Austria for 1997 and 2004
b) Estimate corresponding carbon balances for exports and imports
c) Provide insight into carbon leakage
- countries comprising Annex I (developed countries)
- non-Annex I (developing and emerging economies)
The Carbon Content of Austrian Trade
Multi-Regional Input-Ouput Trade Models
Types of models (i.e. sophistication)
- Autonomous tradeassumes imports produced with same technology as used in importing country
- Unidirectional tradetraces commodities back to producing regionbut only exporter country´s emissions considered (no emissions embodied in goods imported from third regions considered)
- Multidirectional tradeconsiders full feedback loop
6
Final Demand (F)
Region\ Region
Aust
ria
Ger
man
y
Chin
a
Russ
ia
Ital
y
R.o
.W
Aust
ria
R.O
.W.
Tot
alO
utp
uts
code (AT) (DE) (CH) (RU) (IT) (W) (AT) (W) (XX)
Austria (AT) Zat,at Yat,at XAT
Germany (DE)
China (CH)
Russia (RU)
Italy (IT)
Rest of the World (W)
Value-Added (VA)
Total Output (XX) XAT
Intermediate Demand (A)
Methodology: Multi-Regional Input-Ouput Analysis (MRIO)
7
Final Demand (F)
Region\ Region
Aust
ria
Ger
man
y
Chin
a
Russ
ia
Ital
y
R.o
.W
Aust
ria
R.O
.W.
Tot
alO
utp
uts
code (AT) (DE) (CH) (RU) (IT) (W) (AT) (W) (XX)
Austria (AT) Zat,at Yat,at XAT
Germany (DE) Zde,de XDE
China (CH) Zch,ch XCH
Russia (RU) Zru,ru XRU
Italy (IT) Zit,it XIT
Rest of the World (W) Zw,w Yw,w XW
Value-Added (VA)
Total Output (XX) XAT XDE XCH XRU XIT XW
Intermediate Demand (A)
Methodology: Multi-Regional Input-Ouput Analysis (MRIO)
8
Final Demand (F)
Region\ Region
Aust
ria
Ger
man
y
Chin
a
Russ
ia
Ital
y
R.o
.W
Aust
ria
R.O
.W.
Tot
alO
utp
uts
code (AT) (DE) (CH) (RU) (IT) (W) (AT) (W) (XX)
Austria (AT) Zat,at Yat,at XAT
Germany (DE) Zde,at Zde,de Yde,at XDE
China (CH) Zch,ch XCH
Russia (RU) Zru,ru XRU
Italy (IT) Zit,it XIT
Rest of the World (W) Zw,w Yw,w XW
Value-Added (VA)
Total Output (XX) XAT XDE XCH XRU XIT XW
Intermediate Demand (A)
Methodology: Multi-Regional Input-Ouput Analysis (MRIO)
9
Final Demand (F)
Region\ Region
Aust
ria
Ger
man
y
Chin
a
Russ
ia
Ital
y
R.o
.W
Aust
ria
R.O
.W.
Tot
alO
utp
uts
code (AT) (DE) (CH) (RU) (IT) (W) (AT) (W) (XX)
Austria (AT) Zat,at Zat,de Yat,at XAT
Germany (DE) Zde,at Zde,de Yde,at XDE
China (CH) Zch,ch XCH
Russia (RU) Zru,ru XRU
Italy (IT) Zit,it XIT
Rest of the World (W) Zw,w Yw,w XW
Value-Added (VA)
Total Output (XX) XAT XDE XCH XRU XIT XW
Intermediate Demand (A)
Methodology: Multi-Regional Input-Ouput Analysis (MRIO)
10
Final Demand (F)
Region\ Region
Aust
ria
Ger
man
y
Chin
a
Russ
ia
Ital
y
R.o
.W
Aust
ria
R.O
.W.
Tot
alO
utp
uts
code (AT) (DE) (CH) (RU) (IT) (W) (AT) (W) (XX)
Austria (AT) Zat,at Zat,de Zat,ch Zat,ru Zat,it Zat,w Yat,at Yat,w XAT
Germany (DE) Zde,at Zde,de Zde,ch Zde,ru Zde,it Zde,w Yde,at Yde,w XDE
China (CH) Zch,at Zch,de Zch,ch Zch,ru Zch,it Zch,w Ych,at Ych,w XCH
Russia (RU) Zru,at Zru,de Zru,ch Zru,ru Zru,it Zru,w Yru,at Yru,w XRU
Italy (IT) Zit,at Zit,de Zit,ch Zit,ru Zit,it Zit,w Yit,at Yit,w XIT
Rest of the World (W) Zw,at Zw,de Zw,ch Zw,ru Zw,it Zw,w Yw,at Yw,w XW
Value-Added (VA) VAT VDE VCH VRU VIT VW
Total Output (XX) XAT XDE XCH XRU XIT XW
Intermediate Demand (A)
Methodology: Multi-Regional Input-Ouput Analysis (MRIO)
The Carbon Content of Austrian Trade
Data
Data base: Global Trade Analysis Project (GTAP)
GTAP v7 (relates to 2004): 113 regions
GTAP v5 (relates to 1997): 66 regions
57 industries per region
C02 emissions: IEA energy statistics (fuel combustion)
process emissions (UNFCCC) added in this project
The Carbon Content of Austrian Trade
Categories and Indicators \Year 1997 2004
Domestic Consumption 44,314 47,780
Consumption in products domestically produced 27,695 29,153
Household (direct consumption) 16,619 18,627
Exports 22,943 31,800
Exports Domestically produced 20,483 27,558
Exports of International Transport 2,460 4,242
Imports (for Austrian Consumption) 44,366 61,988
Imports coming from Annex I countries 34,343 41,408
Imports coming from Non-Annex I countries 10,023 20,581
Imports of International Transport Not available Not available
Indicators
Net Emission Balance (excluding Int. Transport) - 23,884 - 34,430
Consumption-Based Principle (CBP) 88,680 109,768
Production-Based Principle (PBP) 67,257 79,580
Ratio CBP/PBP 1.32 1.38
CO2 Emissions per capita based on PBP (in tons) 8.44 9.74
CO2 Emissions per capita based on CBP (in tons) 11.13 13.42
In thousands of tons of CO2.
Results
The Carbon Content of Austrian Trade
How do other countries behave concerning carbon relocation?
38%
-40%
-20%
0%
20%
40%
60%
80%
100%
Swit
zerl
and
Swed
enFr
ance UK
Aust
ria
Den
mar
kBe
lgiu
mIt
aly
Irel
and
Gre
ece
Spai
nG
erm
any
Port
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Luxe
mbo
urg
Finl
and
Net
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ands
Sing
apor
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pan
Uni
ted
Stat
es
Pola
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man
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ech
Repu
blic
Russ
ia
Braz
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nada
Indi
aIn
done
sia
Arge
ntina
Thai
land
Chin
a
The Carbon Content of Austrian Trade
How do other countries behave concerning carbon relocation?
99%
69%
42%39%
38%
-40%
-20%
0%
20%
40%
60%
80%
100%
Swit
zerl
and
Swed
enFr
ance UK
Aust
ria
Den
mar
kBe
lgiu
mIt
aly
Irel
and
Gre
ece
Spai
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erm
any
Port
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Luxe
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urg
Finl
and
Net
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Sing
apor
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Uni
ted
Stat
es
Pola
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Arge
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Thai
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Chin
a
The Carbon Content of Austrian Trade
How do other countries behave concerning carbon relocation?
99%
69%
42%
39%38%36%34%
26%22%21%
20%19%
18%
11% 9%6%
-40%
-20%
0%
20%
40%
60%
80%
100%
Swit
zerl
and
Swed
enFr
ance UK
Aust
ria
Den
mar
kBe
lgiu
mIt
aly
Irel
and
Gre
ece
Spai
nG
erm
any
Port
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Luxe
mbo
urg
Finl
and
Net
herl
ands
Sing
apor
eJa
pan
Uni
ted
Stat
es
Pola
ndBu
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iaRo
man
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ech
Repu
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Russ
ia
Braz
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nada
Indi
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done
sia
Arge
ntina
Thai
land
Chin
a
The Carbon Content of Austrian Trade
How do other countries behave concerning carbon relocation?
99%
69%
42%
39%38%36%34%
26%22%21%
20%19%
18%
11% 9%6%
54%
25%
10%
-40%
-20%
0%
20%
40%
60%
80%
100%
Swit
zerl
and
Swed
enFr
ance UK
Aust
ria
Den
mar
kBe
lgiu
mIt
aly
Irel
and
Gre
ece
Spai
nG
erm
any
Port
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Luxe
mbo
urg
Finl
and
Net
herl
ands
Sing
apor
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pan
Uni
ted
Stat
es
Pola
ndBu
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man
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ech
Repu
blic
Russ
ia
Braz
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nada
Indi
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done
sia
Arge
ntina
Thai
land
Chin
a
The Carbon Content of Austrian Trade
How do other countries behave concerning carbon relocation?
99%
69%
42%
39%38%36%34%
26%22%21%
20%19%
18%
11% 9%6%
54%
25%
10%
-10%
-11%
-17%
-21%
-23%
-40%
-20%
0%
20%
40%
60%
80%
100%
Swit
zerl
and
Swed
enFr
ance UK
Aust
ria
Den
mar
kBe
lgiu
mIt
aly
Irel
and
Gre
ece
Spai
nG
erm
any
Port
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Luxe
mbo
urg
Finl
and
Net
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ands
Sing
apor
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Uni
ted
Stat
es
Pola
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man
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Repu
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Russ
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Braz
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Indi
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Arge
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Thai
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Chin
a
The Carbon Content of Austrian Trade
How do other countries behave concerning carbon relocation?
99%
69%
42%
39%38%36%34%
26%22%21%
20%19%
18%
11% 9%6%
54%
25%
10%
-10%
-11%
-17%
-21%
-23% -7%
-8%
-8%
-10%
-22%-22%
-23%
-40%
-20%
0%
20%
40%
60%
80%
100%
Swit
zerl
and
Swed
enFr
ance UK
Aust
ria
Den
mar
kBe
lgiu
mIt
aly
Irel
and
Gre
ece
Spai
nG
erm
any
Port
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Luxe
mbo
urg
Finl
and
Net
herl
ands
Sing
apor
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pan
Uni
ted
Stat
es
Pola
ndBu
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man
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Repu
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Russ
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The Carbon Content of Austrian Trade
How do other countries behave concerning carbon relocation?
9.7
6.7 5.9
12.0
3.9 4.3
13.5 13.4
10.0 9.2
3.0 4.3
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
Austria Switzerland Sweden Russia China World
CO2 Emissions per capita based on PBP (in tons)
CO2 Emissions per capita based on CBP (in tons)
The Carbon Content of Austrian Trade
The use of different accounting principles…..
…..is of considerable importance when assigning carbon responsibilities:
In 2004 consumption based indicator 38% larger than the production based one
CO2 emissions embodied in imports: double as much as exports
One third of the emissions embodied in Austrian imports originated in non-Annex I countries in 2004
Consumption based accounting suggests that about 3.5 tons of CO2 per
capita need to be added in comparison with production based indicators.
The Carbon Content of Austrian Trade
Simulation of climate policy and incorporated carbon trade implications
• Use of Production Based Principle only◦ Effectiveness of climate policy overestimated? ◦ No representation of carbon leakage
• Assess the carbon and economic impact of post-2012 climate policy scenarios for Austria and on a global scale◦ Output, Consumption, Trade flows, Carbon emissions◦ Environmental effectiveness of climate policies (carbon leakage)
The Carbon Content of Austrian Trade
The model & data
• Multi-sectoral, multi-regional, Computable General
Equilibrium (CGE) model ◦ Austria/ main trading partners/ world regions (19 regions in total)
◦ 11 sectors: differentiated by energy intensity and whether covered
by EU-ETS
◦ GTAP 7 database 113 countries; 57 commodities; base year 2004
◦ Carbon emissions: unidirectional trade carbon accounting
• Scenario for 2020 (reference)◦ Capital stock, labor, autonomous energy efficiency increase,
multifactor productivity growth
◦ Considering current economic downturn
The Carbon Content of Austrian Trade
The Model – regional (dis)aggregation
• 19 regions based on◦ Austria’s main trading partners◦ Importance to climate policy debate
The Carbon Content of Austrian Trade
The Model – Sectoral (dis)aggregation
The Carbon Content of Austrian Trade
Definition of policy scenarios
The Carbon Content of Austrian Trade
Definition of policy scenarios
The Carbon Content of Austrian Trade
Definition of policy scenarios
The Carbon Content of Austrian Trade
Definition of policy scenarios
The Carbon Content of Austrian Trade
Results – Austrian Output & Trade
0%
5%
10%
15%
20%
25%
30%
35%
BAU ETS_EU NETS_EU PK_H IPCC_H
_Output ETS
_Import ETS
_Export ETS
0%
5%
10%
15%
20%
25%
30%
35%
40%
BAU ETS_EU NETS_EU PK_H IPCC_H
_Output NETS
_Import NETS
_Export NETS
Output and Trade effects for Austria relative to 2004 (in %)
ETS sectors
Non-ETS sectors
The Carbon Content of Austrian Trade
Results – Austrian CO2 emissions
EU unilateral scenarios
Internationally coordinated scenarios for
Annex I
Production based (PBP) vs. Consumption based (CBP) CO2 emissions 2020 (Mt CO2)
0.00
20.00
40.00
60.00
80.00
100.00
120.00
2004 BAU ETS_EU NETS_EU PK_L PK_H IPCC_L IPCC_H
PBP
CBP
9% 9% 9% 15% 21% 24% 20% 24%
The Carbon Content of Austrian Trade
Results – on a global scale
• CO2 emissions should globally decrease from the 2004 level (2 degree objective)
• In all scenarios but IPCC_H: by 2020: CO2 emission increases in unregulated regions > CO2 emission reduction efforts
in Annex I regions
Change in CO2 emissions (in Mt CO2) per region and per scenario by 2020 relative to 2004
Carbon Leakage Rate
Scenario for 2020
ETS_EU NETS_EU PK_L PK_H IPCC_L IPCC_H
Leakage Rate
58% 54% 28% 27% 22% 21%
The Carbon Content of Austrian Trade
Leakage Rate = -
∆ CO2 non policy regions (relative
BAU)
∆ CO2 policy regions (relative BAU)
The Carbon Content of Austrian Trade
Conclusions
• Past: Multidirectional model of Austrian trade: CO2 emissions under CBP
are 38% larger than under PBP (2004), a ratio increasing since 1997
• Future: Relatively strong effects of climate policy on energy intensive industries
• Overestimation of climate policy effectiveness by PBP
• Gap between Austria’s CO2 emissions according to PBP and CBP to
increase for strict and not-comprehensive scenarios
• On a global scale, CO2 emission reductions due to most climate policies
as discussed pre-Copenhagen are more than counterbalanced by emission increases in non-abating regions
• Carbon Leakage decreases as climate policies become more comprehensive
• For a future post-2012 climate policy agreement the inclusion of ALL world regions – though respecting the principle of common but differentiated responsibilities – is crucial
The Carbon Content of Austrian Trade
Further information…
Full report available at:
www.fiw.ac.at > research studies 2009/2010
Karl Steininger [email protected]
Thomas [email protected]
Wegener Center for Climate and Global Change
University of Graz Leechgasse 25
A-8010 Graz, Austria