Greenhouse gases embodied in the international trade and final consumption of Finland: An input–output analysis

The estimation of greenhouse gas (GHG) emissions associated with international trade and final consumption gives a more complete and balanced picture of the responsibilities of various countries for the emissions that cause the climate change. The aim of this study was to look at the impact of the coverage of the GHGs and their sources and assumptions regarding the emissions of imports on the results of GHG emissions associated with international trade and final consumption of Finland. In addition to a single year study, a trend covering years 1990–2003 was produced for Finland to study the development of the GHG emissions associated with domestic consumption and the reasons behind the development. According to our results Finland was in 1999 a net exporter of CO₂ from fossil fuel combustion, CO₂ from all sources and GHGs of 4(4.2), 5 or 7 Gkg, respectively. The impact of different assumptions concerning the emissions embodied in imports in the case of Finland was tested by using the domestic emission intensities and the ratios of embodied emissions in imports in relation to domestic products by utilizing the data from the study by (OECD, 2003b. Carbon Dioxide Emissions Embodied in International Trade of Goods, STI Working Paper 2003/15, OECD, Paris). In the case of Finland, the differences of results calculated with these two methods remained rather small. The total emissions embodied in the imports changed from 33.8 to 34.4 Gkg and consequently the net export of CO₂ from fossil fuel combustion changed from 4.2 to 3.6 Gkg. The results for 1990–2003 show that the GHG emissions embodied in the exports have exceeded the GHG emissions embodied in the imports from early 1990s. The reason for the increasingly positive GHG trade balance in the case of Finland has been the change in the magnitude of trade rather than the changes in its structure. The results show also that the impact of international transport on the emission intensity of imports is significant and merits further research.     

Methane emissions by Chinese economy: Inventory and embodiment analysis

Concrete inventories for methane emissions and associated embodied emissions in production, consumption, and international trade are presented in this paper for the mainland Chinese economy in 2007 with most recent availability of relevant environmental resources statistics and the input–output table. The total CH₄ emission by Chinese economy 2007 estimated as 39,592.70 Gg is equivalent to three quarters of China's CO₂ emission from fuel combustion by the global thermodynamic potentials, and even by the commonly referred lower IPCC global warming potentials is equivalent to one sixth of China's CO₂ emission from fuel combustion and greater than the CO₂ emissions from fuel combustion of many economically developed countries such as UK, Canada, and Germany. Agricultural activities and coal mining are the dominant direct emission sources, and the sector of Construction holds the top embodied emissions in both production and consumption. The emission embodied in gross capital formation is more than those in other components of final demand characterized by extensive investment and limited consumption. China is a net exporter of embodied CH₄ emissions with the emission embodied in exports of 14,021.80 Gg, in magnitude up to 35.42% of the total direct emission. China's exports of textile products, industrial raw materials, and primary machinery and equipment products have a significant impact on its net embodied emissions of international trade balance. Corresponding policy measures such as agricultural carbon-reduction strategies, coalbed methane recovery, export-oriented and low value added industry adjustment, and low carbon energy polices to methane emission mitigation are addressed.     

Input–output analysis of CO2 emissions embodied in trade: Competitive versus non-competitive imports

Energy-related CO₂ emissions embodied in international trade have been widely studied by researchers using the environmental input–output framework. In the literature two different approaches to deal with emissions embodied in a country's imports can be found. One of the approaches is based on the assumption of competitive imports while the other is based on the assumption of non-competitive imports. We show that the implications of the results obtained using different imports assumptions are not the same. The approach using the competitive imports assumption gives estimates larger than those obtained using the non-competitive import assumption. The differences between the two embodiment estimates come from the transition of embodied emissions in China's imports for intermediate consumption to those in China's exports. This explains why relatively high estimates of CO₂ emissions embodied in China's exports are reported in several recent studies appearing in Energy Policy.     

Energy embodied in the international trade of China: An energy input–output analysis

Growing international trade has not only positively affected the People’s Republic of China’s (China’s) economic development, but also expanded the exportation of energy embodied in goods during their production. This energy flow out will pose risks to China’s rational utilization of natural resources as well as environmental protection. In this paper, we evaluate the energy embodied in goods produced in China during 1992–2005 and use input–output structural decomposition analysis to identify five key factors causing the changes of energy embodied in exports. (Direct primary energy efficiency, primary energy consumption structure, structure of intermediate inputs, structure of exports, and scale of exports.) For the three sub-periods of 1992–1997, 1997–2002, and 2002–2005, results show that China is a net exporter of energy, and the energy embodied in exports tends to increase over time. The expanding total volume of exports and increasing exports of energy-intensive goods tend to enlarge the energy embodied in exports within all three sub-periods, but these driving forces were offset by a considerable improvement of energy efficiency and changes in primary energy consumption structure from 1992 to 2002 and the effects of structure of intermediate input only in the sub-period from 1992 to 1997. From 2002 to 2005, the sharp augmentation of energy embodied in exports was driven by all the five factors. Our research has practical implications for the Chinese economy. Results of this study suggest that the energy embodied in trade should receive special attentions in energy policies design to limit the energy resource out-flow and pollution generation.     

Renewable energy,trade, and economic growth in the Asia-Pacific region

This paper employs panel multivariate technology to probe the impact of renewable energy and trade (imports and exports) on the output and to study the Granger causality between the mentioned variables with a sample of 15 Asia-Pacific countries for the period of 1994–2014. Short-run causality tests show bidirectional causal relationship between the output and exports and no Granger causal relationship from imports to renewable energy or the output. Moreover, long-run causality tests show bidirectional causality between the output and renewable energy, and unidirectional causality from international trade (imports and exports) to the output and renewable energy. The long-run elasticities indicate that the renewable energy consumption and trade play positive roles in economic growth. This study’s energy policy recommendation is that policy authorities should encourage the development of trade (imports and exports), which not only drives economic growth and prosperity but also accelerates the pace of renewable energy consumption.     

Evaluating carbon dioxide emissions in international trade of China

China is the world's largest emitter of carbon dioxide (CO₂). As exports account for about one-third of China's GDP, the CO₂ emissions are related to not only China's own consumption but also external demand. Using the input–output analysis (IOA), we analyze the embodied CO₂ emissions of China's import and export. Our results show that about 3357 million tons CO₂ emissions were embodied in the exports and the emissions avoided by imports (EAI) were 2333 million tons in 2005. The average contribution to embodied emission factors by electricity generation was over 35%. And that by cement production was about 20%. It implies that the production-based emissions of China are more than the consumption-based emissions, which is evidence that carbon leakage occurs under the current climate policies and international trade rules. In addition to the call for a new global framework to allocate emission responsibilities, China should make great efforts to improve its energy efficiency, carry out electricity pricing reforms and increase renewable energy. In particular, to use advanced technology in cement production will be helpful to China's CO₂ abatement.     

The embodied energy in trade: What role does specialization play?

Many industrialized countries are net importers of embodied energy and emissions, while many developing countries are net exporters. We examine the role of specialization in driving these trade patterns by conducting a spatial index decomposition analysis on the embodied energy in net exports for 41 economies. The results reveal that industrialized countries have generally offshored energy intensive production, which many developing countries specialize in. We find that specialization, on average, makes the biggest contribution, accounting for roughly 50% of a country's embodied energy in net exports. However, other factors, namely energy intensity and the trade balance, combine to make an equally important contribution. In summary, specialization, despite its significant role, is not the only cause of the embodied energy trade patterns observed between industrialized and developing countries.     

China's foreign trade and climate change: A case study of CO2 emissions

The globalization of trade has numerous environmental implications. Trade creates a mechanism for consumers to shift environmental pollution associated with their consumption to other countries. Carbon leakage exerts great influences on international trade and economy. Applying an input–output approach, the paper estimates the amount of carbon dioxide (CO₂) embodied in China's foreign trade during 1997–2007. It is found that 10.03–26.54% of China's annual CO₂ emissions are produced during the manufacture of export goods destined for foreign consumers, while the CO₂ emissions embodied in China's imports accounted for only 4.40% (1997) and 9.05% (2007) of that. We also estimate that the rest of world avoided emitting 150.18 Mt CO₂ in 1997, increasing to 593 Mt in 2007, as a result of importing goods from China, rather than manufacturing the same type and quantity of goods domestically. During 1997–2007, the net “additional” global CO₂ emissions resulting from China's exports were 4894 Mt. Then, the paper divides the trade-embodied emissions into scale, composition and technical effect. It was found that scale and composition effect increased the CO₂ emissions embodied in trade while the technical effect offset a small part of them. Finally, its mechanism and policy implications are presented.     

China's energy consumption under the global economic crisis: Decomposition and sectoral analysis

It is now widely recognized that there is a strong relationship between energy consumption and economic growth. Most countries′ energy demands declined during the economic depression of 2008–2009 when a worldwide economic crisis occurred. As an export-oriented economy, China suffered a serious exports decline in the course of the crisis. However, it was found that energy consumption continued to increase. Against such a background, this paper aims to assess and explain the factors causing the growth of energy consumption in China. First, we will explain the impact of domestic final use and international trade on energy consumption by using decomposition analysis. Second, embodied energy and its variation across sectors are quantified to identify the key sectors contributing to the growth. Lastly, the policy implications for long-term energy conservation are discussed. The results show that the decline in exports was one of the driving forces for energy consumption reduction in the crisis, but that the growth of domestic demand in manufacturing and construction, largely stimulated by economic stimulus plans, had the opposite effect on energy consumption. International trade contributed to decreasing energy consumption of China during and after the crisis because the structure of exports and imports changed in this period.     

Has energy conservation been an effective policy for Thailand? An input–output structural decomposition analysis from 1995 to 2010

Thailand has depended heavily on imported fossil fuels since the 1990s, which hindered the nation's economic development because it created uncertainty in the nation's fuel supply. An energy conservation policy was implemented in 1995 to require industries to reduce their energy intensity (EI) and consumption immediately. This study investigates the effectiveness of the policy between 1995 and 2010 using the hybrid input–output approach. Surprisingly, EI improvement was observed in only a few sectors, such as transportation, non-metallic, paper, and textile. An embodied energy decomposition analysis revealed that while households were the largest energy consumer in 1995, energy consumption in exports exceeded that of households in 2000, 2005 and 2010. In addition, structural decomposition analysis revealed the final demand effect was the strongest factor in determining the efficacy of energy conservation, whereas the energy efficiency effect was not an effective factor as expected for decreasing energy consumption. Policy barriers and conflicting economic plans were factors that affected the outcome of these energy policies.     

Embodied energy and intensity in China’s (normal and processing) exports and their driving forces, 2005-2015

International trade has important impacts on a country’s energy consumption. This paper first uses the time-series (2005–2015) extended input-output database to study China’s embodied energy and intensity in both normal and processing exports. Structural decomposition analysis (SDA) is then applied to analyze the driving forces behind the embodiment changes. The empirical results show that China’s energy embodied in both normal and processing exports first increased in 2005–2008, dropped in 2009 due to the global financial crisis, and then rose again after 2009, and finally dropped in 2014–2015. The embodied energy in trade as a percentage of total energy consumption in China was relatively stable before and after the global financial crisis, at around 28% over the 2005–2008 period, and 22% over the 2009–2015 period. The contribution of the aggregate embodied intensity (AEI) of exports to China’s aggregate energy intensity dropped from 30% in 2005 to 21% in 2015. Among China’s trading partners, the United States, Japan and Korea together accounted for around half of China’s embodied energy and AEI in exports in 2005, but their shares dropped to only one third in 2015. Energy efficiency improvement played the key role in reducing the embodied energy and intensity in China’s exports. Similar analysis can be applied to other regions and indicators.     

Trade and energy consumption in the Middle East

Over the past 30 years many economies have experienced large increases in economic trade, income and energy consumption. This brings up an interesting question. How do increases in trade affect energy consumption? This study uses panel cointegration data estimation techniques to examine the impact of trade on energy consumption in a sample of 8 Middle Eastern countries covering the period 1980 to 2007. Short-run dynamics show Granger causality from exports to energy consumption, and a bi-directional feedback relationship between imports and energy consumption. Long run elasticities estimated from FMOLS show that a 1% increase in per capita exports increases per capita energy consumption by 0.11% while a one percent increase in per capita imports increases per capita energy consumption by 0.04%. These results are important in establishing that increased trade affects energy demand in the Middle East in both the short and long-run. This has implications for energy policy and environmental policy.     

The oil-slick trade: An analysis of embodied crude oil in China's trade and consumption

China has become the world's second largest crude oil importer and consumer. The international fragmentation of production has had an important impact on China's oil consumption, which cannot be assessed adequately through only checking China's trade data of crude oil. Based on a global multi-regional input–output model, we examine crude oil embodied in China's trade during 1995–2011. The results show that approximately one fifth to one third of imported oil in China is re-exported through producing commodities and services for satisfying final consumption outside China. We show that China is playing a role as a transit hub of crude oil from extraction locations to global consumers, particularly those in advanced countries. Foreign consumers actually benefit from China's global seeking of natural resources, a fact that is usually overlooked by critics of China's oil thirst. In addition, we show that China's oil import dependence assessed from the consumption side is greater than when assessed from the production side, shedding new light on the discussion of energy security in China.     

Output,renewable and non-renewable energy consumption and international trade: Evidence from a panel of 69 countries

This paper uses panel cointegration techniques to examine the causal relationship between output, renewable and non-renewable energy consumption, and international trade for a sample of 69 countries during the period 1980–2010. In the short-run, Granger causality tests show that there is a bidirectional causality between output and trade (exports or imports), a bidirectional causality between non-renewable energy and trade, and a one way causality running from renewable energy to trade. In the long-run, a bidirectional causality between renewable energy and trade, is noticed. Our long-run ordinary least squares (OLS), fully modified OLS (FMOLS) and dynamic OLS (DOLS) estimates suggest that renewable, non-renewable energy consumption and trade have a positive and statistically significant impact on economic growth. Our energy policy recommendations are the following: i) any non-renewable energy policy should take into account the importance of international trade, ii) more renewable energy use should be encouraged by national and international competent authorities in order to increase international economic exchanges and promote economic growth without harming the environment, and iii) increasing trade is a good vehicle for renewable energy technology transfer and contributes to increase renewable energy consumption in the long-run, thus contributing to reducing greenhouse gas emissions.     

UK energy policy ambition and UK energy modelling—fit for purpose?

Aiming to lead amongst other G20 countries, the UK government has classified the twin energy policy priorities of decarbonisation and security of supply as a “centennial challenge”. This viewpoint discusses the UK's capacity for energy modelling and scenario building as a critical underpinning of iterative decision making to meet these policy ambitions. From a nadir, over the last decade UK modelling expertise has been steadily built up. However extreme challenges remain in the level and consistency of funding of core model teams — critical to ensure a full scope of energy model types and hence insights, and in developing new state-of-the-art models to address evolving uncertainties. Meeting this challenge will facilitate a broad scope of types and geographical scale of UK's analytical tools to responsively deliver the evidence base for a range of public and private sector decision makers, and ensure that the UK contributes to global efforts to advance the field of energy-economic modelling.     

Consumption-based carbon emissions and trade nexus: Evidence from nine oil exporting countries

The relationship between international trade and carbon emissions has been studied extensively; nonetheless, consumption-based carbon emissions, which is adjusted for international trade, have not been studied. This study is an attempt to address the gap by using consumption-based carbon emissions which is adjusted for trade in case of oil-exporting countries. The effect of international trade is analyzed by treating exports and imports separately from 1990 to 2018. The long-run impact of all variables, i.e., exports, imports, and gross domestic product (GDP) is higher than the short-run coefficients. The empirical evidence, both in the long-run and short-run, confirms the negative effect of exports on consumption-based carbon emissions. Furthermore, gross domestic product (GDP) and imports have a positive and statistically significant impact on consumption-based carbon emissions both in the short-run and long-run. Policies related to consumption-based carbon emissions and international trade shall realize the effect of government policies to absorb it fully by taking approximately two years.     

What is driving CO2 emissions in a typical manufacturing center of South China? The case of Jiangsu Province

Investigating CO₂ emissions of China's manufacturing centers contributes to local and global CO₂ mitigation targets. This study considers Jiangsu Province as a representation of manufacturing centers in South China. Effects of material efficiency improvements, technology development, consumption structure changes and consumption volume growth in Jiangsu Province on its CO₂ emissions during 1997–2007 are investigated using structural decomposition analysis based on environmental input–output table. In order to reduce CO₂ emissions, Jiangsu Province should not only rely on material efficiency improvements and technology development, but also rely on consumption structure changes. For consumption structure changes in detail, Jiangsu Province should not only focus on fixed capital formation and urban residential consumption, but also focus on international and intranational imports and exports. For the implementation of material efficiency improvements and technology development, Jiangsu Province should focus on technology innovation and international technology transfer. For the implementation of consumption structure changes, Jiangsu Province should mainly focus on identified sectors for each separate final demand category: five sectors for urban residential consumption, three sectors for fixed capital formation, four sectors for international exports, five sectors for intranational exports, three sectors for international imports and four sectors for intranational imports.     

Tidal current energy resource assessment in Ireland: Current status and future update

Interest in renewable energy in Ireland has increased continually over the past decade. This interest is due primarily to security of supply issues and the effects of climate change. Ireland imports over 90% of its primary energy consumption, mostly in the form of fossil fuels. The exploitation of Ireland's vast indigenous renewable energy resources is required in order to reduce this over-dependence on fossil fuel imports to meet energy demand. Various targets have been set by the Irish government to incorporate renewable energy technologies into Ireland's energy market. As a result of these targets, the development in wind energy has increased substantially over the past decade; however this method of energy extraction is intermittent and unpredictable. Ireland has an excellent tidal current energy resource and the use of this resource will assist in the development of a sustainable energy future. Energy extraction using tidal current energy technologies offers a vast and predictable energy resource. This paper reviews the currently accepted tidal current energy resource assessment for Ireland. This assessment was compiled by Sustainable Energy Ireland in a report in 2004. The assessment employed a 2-dimensional numerical model of the tidal current velocities around Ireland, and from this numerical model the theoretical tidal current energy resource was identified. With the introduction of constraints and limitations, the technical, practical, accessible and viable tidal current energy resources were obtained. The paper discusses why the assessment needs updating including the effect on the assessment of the current stage of development of tidal current turbines and their deployment technology.     

CO2 emissions embodied in China–US trade: Input–output analysis based on the emergy/dollar ratio

To gain insight into changes in CO₂ emissions embodied in China–US trade, an input–output analysis based on the emergy/dollar ratio (EDR) is used to estimate embodied CO₂ emissions; a structural decomposition analysis (SDA) is employed to analyze the driving factors for changes in CO₂ emissions embodied in China's exports to the US during 2002–2007. The results of the input–output analysis show that net export of CO₂ emissions increased quickly from 2002 to 2005 but decreased from 2005 to 2007. These trends are due to a reduction in total CO₂ emission intensity, a decrease in the exchange rate, and small imports of embodied CO₂ emissions. The results of the SDA demonstrate that total export volume was the largest driving factor for the increase in embodied CO₂ emissions during 2002–2007, followed by intermediate input structure. Direct CO₂ emissions intensity had a negative effect on changes in embodied CO₂ emissions. The results suggest that China should establish a framework for allocating emission responsibilities, enhance energy efficiency, and improve intermediate input structure.     

Energy security in the industrialized world

The quest for energy security is a major concenr of industrialized countries which are mass consumers of primary energy. The various forms of fossil fuels — crude oil, natural gas, coal and uranium — are, like many commodities, exposed to the law of supply and demand in national and international trade. Demand for fuels, especially oil, has been growing fast since the 1960s. Supply, as for all commodities, is distributed according to geology, irrespective of political boundaries. Supply is abundant, especially for coal. The proved reserve/production ratio is in the order of 30 years for oil and 50 years for gas given the present state of exploration.