Abstract
This paper investigates the health and economic consequences of trade due to various air pollutants embodied in exports and imports. We compare the US emissions generated for US exports and those that were avoided by importing. An input–output framework of the US economy is employed together with a comprehensive database on damages (expressed in monetary terms) generated by pollutants, as estimated by Muller et al. (2011). We find that damages associated with international trade in 2002 were considerable. The net result is that damages were avoided through trade and that these avoided damages amounted to 2.7% of the US trade deficit and 3.4% of the US value-added associated with trade. Moreover, the computed “damage to value-added ratios” differed greatly across industries. Exports in some industries are so hazardous that more than half of the value-added gained from extra exports disappeared due to environmental damages. These findings imply that the US might benefit more from trade by increasing its exports more in low damage-intensive products than in high damage-intensive products.
Highlights
Reports by the US Environmental Protection Agency (EPA) show that emissions of air pollutants in the US decreased substantially since 1980
We present our main results for damages associated with international trade of the US in Table 1.12 Let us first focus on results for a
In the Crop Production sector, the net exports are $4.4 billion and the value added contained in these exports adjusted for damages from air pollutants is $3.6 billion (ΔVA- ΔD)
Summary
Reports by the US Environmental Protection Agency (EPA) show that emissions of air pollutants in the US decreased substantially since 1980. Global environmental challenges have prompted increased attention to the environmental performance of individual countries, for example in relation to pledges made by countries in various international treaties Such a focus disregards that the growing intensity of international trade in both intermediate inputs and final products has led to increasing differences between the location of emissions and the location of the use of the associated final products: substituting domestically produced goods by imports contributes to reducing domestically emitted pollutants, but increases these elsewhere. Recent studies employ global input-output tables that allow for more accurate estimations of traded emissions (e.g., Davis and Caldeira, 2010; Peters et al, 2011; Moran et al, 2013) Another part of the literature on environmental degradation focuses on “emission-damage analysis”. It estimated the total present value of direct benefits from the Clean Air Act from 1990 to 2020 to be about $12 trillion
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