Carbon Footprint of Global Trade

In the last two decades, the global trade has grown at roughly twice the rate of gross domestic product. Trade activities, however, have consequences. One is they contribute to climate change. The carbon footprint is an indicator of the amount of greenhouse gas emissions generated during the production and consumption of goods and services, and it has increasingly become a factor of competitiveness of internationally traded products. The expansion of global trade has increased the carbon footprint of developed countries. The carbon footprint includes the emissions to produce imported products, and excludes those to produce exports.

As global trade has grown, so have the CO2 emissions associated with it. Global trade contributes to global CO2 emissions mainly through freight transport. The International Transport Forum (ITF) estimates that international trade-related freight transport currently accounts for around 30% of all transport- related CO2 emissions from fuel combustion, and more than 7% of global emissions. The shipping of goods and fuel consumption are responsible for a large proportion of greenhouse gas emissions in the supply chain.

The creation of a unified carbon accounting system within the United Nations Framework Convention on Climate Change (UNFCCC) was one of the first initiatives that the international community agreed to. This system was based on a global production system that was concentrated in developed countries. However, the context has changed over the past decades: first, global trade has exploded; and second, some developing countries, foremost China, now account for a major share of GHG (greenhouse gas) emissions.

In line with stronger global trade, the volume of international shipping is expected to grow significantly in the coming years. It is important to restrict CO2 emissions in international marine and aviation sectors more effectively, as well as improve energy efficiency. Increasing global trade could also reduce GHG emissions, if countries that expand production of goods for export invest in green infrastructures and newer lower-carbon technologies. Many industrialized countries have used carbon taxes to discourage fossil fuel emissions and promote clean energy. For example, Sweden has used a carbon tax to reduce greenhouse gas emissions since 1991.