Global | Output-side GHG Emission Intensity: A consistent international indicator

Summary

This Working Paper presents the Output-side greenhouse gas Emission Intensity indicator (OEI), the first consistent and internationally-comparable country-indicator of the GHG emission intensity from a production-perspective; that is, territorial GHG emitted per unit of goods and services produced in a given year.

Key points

• Key points:
• OEI can serve as a rough measure of the relative vulnerability of a country to future emissions abatement policies focused on carbon prices.
• When all GHG emissions are considered (OEI1), least developed countries exhibit the highest emission intensities and relative vulnerabilities.
• On the other hand, when only CO2 emissions from fossil fuel combustion and leaks are contemplated (OEI2), newly industrialized countries stand out.
• The Output-side adjustment is not a mere theoretical formality; the relative ranking position of many small open economies changes in the expected direction in comparison to a standard indicator which does not correct for terms of trade distortions.
• OEI2 provides stronger evidence in favor of the Environmental Kuznets Curve hypothesis than a standard indicator without terms of trade adjustment; that is, from a certain level of GDP per capita onwards, decreases in the carbon intensity level may be compatible with further increases in GDP.

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