Rikard Forslid, 03 April 2020

The transport sector is a significant greenhouse-gas emitter. Because international trade in goods requires transportation, it is regarded with some suspicion by the environmentally concerned. However, trade and transportation may actually decrease emissions if production is ‘dirtier’ than transportation. This column uses a new ‘dirtiness index’ to capture how environmentally harmful a firm is and demonstrates how transportation can reduce global emissions if the production of transport services is cleaner than the production it substitutes. The cleaner transportation is relative to other production sectors, the higher the likelihood that transportation could lower emissions.

David Hummels, Anca Cristea, Laura Puzzello, 17 December 2011

It is well known that international trade leads to greenhouse-gas emissions but policymakers often focus their attention on the production of goods and not their shipment. This column presents findings based on a unique database that allows researchers to calculate emissions for every dollar of world trade. It suggests that international transport emissions warrant serious attention in current climate-change negotiations.

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