International Differences in Emissions Intensity and Emissions Content of Global Trade

Understanding international differences in the emissions intensity of trade and production is essential to understanding the effects of greenhouse gas limitation policies. We develop data on emissions from 41 industrial sectors in 39 countries and estimate the CO2 emissions intensity of production and trade. We find no evidence that developing countries specialize in emissions-intensive sectors; instead, emissions intensities differ systematically across countries because of differences in production techniques. Thus, the technology of developing countries drives the greater emissions intensity of their exports. Our results suggest that international differences in emissions intensity, while substantial, do not play a significant factor in determining patterns of trade.