Global Value Chains and CO2 emissions

María Ángeles Tobarra Gómez
María Ángeles Cadarso Vecina, Luis Antonio López Santiago, Nuria Gómez Sanz and Jorge Enrique Zafrilla Rodríguez
Transport is the second most polluting economic activity, only behind electricity production, in terms of CO2 emissions for the world economy. International freight and passengers transport is the industry with the highest increase in emissions between 1990 and 2006 within EU-27 (European Commission, 2009). The fast growth in international trade and, particularly, trade linked to global value chains, explains partly the increase in emissions linked to international transport for commodities that, as intermediate inputs, travel around the world until they reach the final consumer. On the other hand, the troubles countries face when trying to regulate the international transport that goes beyond the limits of their national jurisdiction have damped pollution-reduction policies in this industry. This is why international transport was not included in the commitments of Kyoto Protocol and it was not until 2012 that air transport has incorporated to the EU emissions market (furthermore, sea transport is still outside). The starting point for our project is a method, that we have already developed (Cadarso et al., 2010), that allows us to calculate transport emissions from distance travelled by the commodities, weight in tons and means of transport (sea, road, air, rail, etc). From that point, we propose a methodology of decomposition to identify the effect on the growth of emissions due to international freight transport from three different elements: a) changes in scale or volume of international trade for different goods and services, b) changes in the means of transport, and c) changes in the country of origin or destination for each commodity. The combination of this methodology and decomposition with the input-output framework allows us also to identify the industries directly and indirectly responsible for that growth in pollution and to decompose changes in those emissions from international transport into: a) technical change, b) growth of final demand, and c) structural change. We will apply this methodology in a first stage to the Spanish economy in 2000-2010. Second stage of this project is to develop a multi-region input-output model with the objective of answering the following question: which part of emissions from international freight transport is due to the growth in world trade of final goods or to the increase in successive stages of production linked to global value chains (and the trade in intermediate products they involve)? In this case, our contribution is based on the fact that research measuring the environmental impact from trade has not focused so far in distinguishing between final and intermediate goods. By doing so, we will be able to evaluate the impact in terms of emissions from the growing international fragmentation of production (offshoring), both because production is increasingly relocated to low-wages countries (that may use more polluting technology) and because of the growth in freight transport among those different locations. Furthermore, we will try to identity the countries and industries responsible for the growth in those CO2 emissions in the successive stages of production in global value chains, using GTAP database and including the calculation of emissions from international freight transport. We will also compare the environmental impact from international transport using different (producer, consumer and shared) responsibility criteria.