On the Interpretation and Measurement of Technology-Adjusted Emissions Embodied in Trade
Aldy Darwili (TU Delft - Economics of Technology and Innovation)
Enno Schröder (TU Delft - Economics of Technology and Innovation)
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Abstract
We propose a new method for standardizing the production technology at the world average level and derive interpretations for the resulting carbon emission concepts. The technology-adjusted emission balance measures net weak carbon leakage defined as the difference between the foreign emissions avoided by exports and the foreign emissions generated by imports. We use global multi-regional input–output tables to document the variable’s spatio-temporal variation for 49 economies between 1995 and 2015. There is a positive cross-country correlation between net leakage and per-capita income. Changes in net leakage are generally small and do not account for country-specific emission trends, that is, domestic emission decreases were not offset by foreign emission increases.
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