Year-end Sale % OFF 
Abstract
This paper introduces a new concept of comparative carbon advantage as a potential climate mitigation tool. According to the concept, welfare gains in terms of reduced global CO2 emissions can be achieved by exploiting cross-country sectoral differences in carbon intensity and decarbonized electricity system. The paper empirically tests the concept by utilizing annual data of Sweden between 1995 and 2008. Overall, the results show that Sweden contributed nearly 590 million tons of potential CO2 emissions savings through its exports by having an efficient and low-carbon production and electricity system. This total amount of 590 million tons of CO2 emissions relates to the total savings made if the same amount and composition of Swedish exports was produced using the world average technology. Furthermore, the contribution of Sweden’s low carbon electricity generation was over 34% of the total savings, of which some 20% were direct exports of electricity and 80% was electricity embodied in exported products. This research provides a critical understanding of the impact of efficient production and low carbon electricity in generating relative comparative carbon advantage—a policy relevant aspect for the increasingly globalized, and carbon-constrained, world.
Highlights
Since the 1970s energy consumption has stabilized in Western Europe, while economic growth has continued [1]
The results show that Sweden contributed nearly 590 million tons of potential CO2 emissions savings through its exports by having an efficient and low-carbon production and electricity system
There is a danger that emission reductions in regulated countries with clear absolute reduction targets become offset by emission increases in unregulated areas or areas with only relative carbon reduction targets
Summary
Since the 1970s energy consumption has stabilized in Western Europe, while economic growth has continued [1]. Ultimate reasons could be a natural shift over to more demand of services than industrial goods as countries develop [2], but it could well be a sign of the outsourcing of heavy industrial activities to emerging economies. Production is often moved to countries that lack stringent environmental legislation and efficient modes of production, where relative carbon intensity is far higher than that of the developed countries. This poses a threat to any ambitious global and national sustainability goals if this means that the developed world is shifting emissions to other non-regulated countries, rather than solving the urgency of global climate change. The evidence is not clear cut on the outsourcing issue: the conventional way of measuring outsourcing has flaws because it overlooks that a significant part of what appears to be outsourcing is only different technology and energy
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
