Keywords: CO2 emissions, carbon emissions, input-output models, national accounting, international trade, greenhouse gas emissions, imports, national emission reduction targets, carbon dioxide
Influence of trade on national CO2 emissions
International trade has an impact on national CO2 emissions and consequently on the ability to fulfil national CO2 reduction targets. Through goods and services traded in a globally interdependent world, the consumption in each country is linked to greenhouse gas emissions in other countries. It has been argued that in order to achieve equitable reduction targets, international trade has to be taken into account when assessing nations' responsibility for abating climate change. Especially for open economies such as Denmark, greenhouse gases embodied in internationally traded commodities can have a considerable influence on the national 'greenhouse gas responsibility'. By using input-output modelling, we analyse the influence from international trade on national CO2 emissions. The aim is to show that trade is the key to define CO2 responsibility on a macroeconomic level and that imports should be founded in a multi-region model approach. Finally, the paper concludes on the need to consider the impact from foreign trade when negotiating reduction targets and base line scenarios.