Commerce vs. Climat ?
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Article Index
CO2 emissions by means of transport
Greenhouse Gas emissions due to trade
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The complex, intertwined relationship between international trade and climate has led to heated debates on the impact of trade on climate and the effect of climate policies on external trade and the international competitiveness of countries. The idea of a “carbon tax” is a case in point, and one that lies directly at the heart of these preoccupations.

The transport sector as a whole accounts for about 20% of total emi- ssions of greenhouse gases (GHGs). While commercial air transport has been the focus of criticism for its negative impact on the climate, three-quarters of CO 2 emissions come from land and maritime transport, which together represent almost 90% of international trade. In fact, air transport turns out to be one of the least environmentally harmful means of transport when judged by its carbon emissions per ton-kilometer (See Table 1), as it accounts for just 13% of emissions in the transport sector. 

Maritime transport is bound to remain the means of transport with the lowest emissions of GHGs. In the theoretical case of continued growth in global trade with current energy efficiency remaining constant, it is estimated that GHGs will rise from 35% to 45% between 2001 and 2020. Very little encouragement to increase the energy efficiency of transport by way of international environmental incentives and regulations has been offered so far, even though considerable reductions in emissions could be obtained.

Growth in regional trade is associated with the growth of land and air transport, given the shorter distances involved, over maritime transport. Hence, this offers little prospect for reducing GHGs resulting from regional trade. According to the Stern report1, in all likelihood, GHG emissions from air transport will rise faster than emissions from other means of transport due to the rise in air traffic associated with the globalization of trade.

This is one area where critics of international trade have voiced their concern, specifically when it comes to “food miles,” the kilometers covered by airplanes carrying agricultural products from their areas of production to the consumer’s plate. In Britain, air transport accounts for 50% of all emissions associated with the transport of fruit and vegetables, whereas it only represents only 1.5% of total imports of these products. In fact, the fruit and vegetables exported by air from Africa to Britain represents up to 10 times their weight in CO 2 emissions, producing 80 times more emissions than if exported by sea. However, when considered from another angle, these British imports by air only represent 0.1% of the total CO 2 emissions of the United Kingdom and actually bring in £200 million to African farmers. So this process now becomes a development factor. As James MacGregor and Bill Vorley of the International Institute for Environment and Development (IIED) put it, “this 0.01% of CO2 emissions arising from the air freight transport of fruit, vegetables, and harvested flowers actually [represents] an efficient investment by the United Kingdom as part of its emissions allocation strategy in that it supports more than one million Africans. Ironically, one might wonder how the 99.9% of the remaining emissions could contribute to development.”

Limiting trade for the sake of the climate?

During the UN summit on the environment held in 2006, the French Government suggested using trade and fiscal policies with a direct bearing on international trade, such as an import tax, to achieve the goals of reducing GHGs. Known as the “Border Tax Adjustment,” this initiative remains a prime emissions reduction strategy for France, and it is also one option among many others available to the European Commission, which is examining the possibility of using imports as a way to stimulate the global effort to reduce GHG emissions. If the conference on the climate to be held in Copenhagen in December 2009 were to come short, and if the unilateral European policy of internationalizing the cost of carbon in an increasing number of economic sectors were to continue, an adjustment (or compensation mechanism) on the trading of the relevant products should limit any loss of competitiveness to European companies. Such a policy would effectively limit the impact of any “outsourcing of the climate,” which is likely to result from a European policy geared toward restricting emissions, with the potential to weaken the European economy and raise emissions levels outside of the European Union.

The compensation (or border tax adjustment) initiative raises the issue of shared responsibility for GHG emissions between producers and exporters on the one hand and importers and consumers on the other. Until recently, the emphasis has been mainly on production when measuring emissions and in determining emissions reduction policies. However, along with a number of other countries, China views this differently. Chinese officials stress that China’s emissions are in large part the result of imports from Western countries. By this token, Chinese exports should represent a quarter to a third of Chinese emissions resulting from its energy consumption. In a study to be published, Glen Peters and Edgar Hartwich have created an indicator, the “balance embodied emissions in trade” (BEET), which measures the balance of emissions contained in the imports and exports of each country. This indicator puts China’s balance at 585.5 million tons of CO 2. In other words, China’s exports contain 585.5 million more tons of carbon than do its imports. This is in marked contrast with the negative balance of 439.9 million tons of CO2 of the United States (See Table 2). The controversies over “food miles” and the “border adjustment tax” are two examples that highlight the complex relationship between trade and climate as well as the difficulties involved in The controversies over “food miles” and the “border adjustment tax” are two examples that highlight the complex relationship between trade and climate trying to use trade as leverage in climate policy negotiations or vice versa. Pascal Lamy, Director of the World Trade Organization (WTO), adopts a cautious approach and warns that employing trade policies to resolve climate issues is likely to be inefficient and even counterproductive so long as the management of climate issues in the post-Kyoto era, which will open in 2012, is not stable enough for the implementation of multilateral policies. It is important that each negotiation, of climate on the one hand and of trade on the other, remain separate to avoid the risk of becoming bogged down. The opposite approach is to treat these two issues together while ensuring that emerging countries, which are key actors in this process, are incentivized enough to commit themselves deeper to climate negotiations. In the case of trade between the European Union and China, for example, the compensation (or “border tax adjustment”) mechanism could be substituted for taxes within China on the export of Chinese products equivalent to European products that are subjected to emissions market mechanisms as this will save having to levy import taxes in Europe. Similarly, the European Union (EU) could open its market to Brazilian exports and in particular its agro-energetic products in exchange for political backing by Brazil for some European Union positions in climate negotiations. The same “swap” policy of opening the EU market in exchange for backing EU climate policies could be extended to India.

CO2 emissions by means of transport

Source : R. A. Kraemer, Fr. Hinterberg et R. Tarasofsky, " What Contribution Can Trade Policy Make towards Combating Climate Change ? ", Study for the Policy Department External Policies, European Parliament, 2007.

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Greenhouse Gas emissions due to trade

Source : G. P. Peters et E. G. Hertwich, " CO2 Embodied in International Trade with Implications for Global Climate Policy ", Environmental Science and Technology, 42 (5), 2008, p. 1 401-1 407. Note : L'annexe B du protocole de Kyoto rassemble des pays, essentiellement industrialisés, qui avaient accepté des objectifs quantifiés de réduction de leurs émissions de GES.

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Bibliography

Stern, N. (2006). Stern review on the economics of climate change. Oxford: Oxford University Press.