The Influence of Imports and Exports on the Evolution of Greenhouse Gas Emissions: The Case for the European Union

Abstract

Part of a country’s emissions are caused by producing goods for export to other countries, while a country’s own needs also generate emissions in other parts of the world that are associated with the products they import. Our interest was to evaluate the influence of imports and exports of goods and services on greenhouse gas (GHG) emissions in a data panel composed of 30 countries over 21 years. We included as control variables the gross domestic product per capita, employment, an indicator of the economic crisis and a non-linear trend and inferences were performed using a Bayesian framework. The results showed that it was the exports and imports of goods, rather than services, that were related to CO2-equivalent levels. Exports and imports of goods were very inelastic, albeit less so in the case of the index. In summary, the more a country imports, the higher their GHG emission levels are. However, it is important to point out that when employment rates are higher more energy is consumed and GHG emissions are greater. In richer countries, GDP per capita is the factor that best explains why their emissions are so high