In a recent study on trade and the environment, the Yale Center for Environmental Law & Policy conducted a pilot time trend analysis, painting a clearer picture of the complex relationship between country-level CO2emissions and trade intensity. The analysis examines changes in trade intensity (as seen through trade as a percent of GDP) alongside two measures of CO2 emissions—CO2 per capita and CO2 per GDP. The former CO2 measure indicates emissions intensity per person, while the latter indicates the emissions intensity of the economy.
Time trends show that the most common phenomenon is a decline in emissions per GDP with increasing trade intensity, an indication that economies become more carbon efficient as trade becomes a greater portion of GDP. However, the data also reveal a troubling trend among countries: emissions per capita most commonly increase with increasing trade, an indication that trade might be harmful in terms of emissions.
The exciting news—at least for those interested in trade and environmental quality—is that this trend is by no means universal. Many countries have managed decreasing emissions per capita with increases in trade intensity. This elite group includes many European nations—Germany, France, the UK, Sweden and Denmark—as well as several countries in the Americas—Belize, Colombia, and Cuba.
While considerable work is still needed help deepen understanding of the complicated relationships between trade and the environment and while the statistical findings do not support drawing conclusions about causation, it is interesting to pose the question – what are these nations doing differently?