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The Carbon Footprint of Global Trade Tackling Emissions from International Freight Transport

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The Carbon Footprint of Global Trade Tackling Emissions from International Freight Transport The Carbon Footprint of Global Trade Tackling Emissions from International Freight Transport 1 International Transport Forum: Global dialogue for better transport Growing concern Projected increase of CO2 emissions from trade-related international freight CO2 emissions om eight = 30% 7% of all transport-related of global CO2 emissions from fuel CO2 emissions combustion The issue CO2 emissions from global freight transport are set to increase fourfold Growth in international trade has been more empty runs and increased demand for rapid, characterised by globalisation and the associated energy-intensive transport such as air freight. As geographical fragmentation of international freight transport — whether by air, land or sea — production processes. Supply chains have become relies heavily on fossil fuel for propulsion and is longer and more complex, as logistics networks link still a long way from being able to switch to cleaner more and more economic centres across oceans energy sources, it is one of the hardest sectors to and continents. Changing consumer preferences decarbonise. and new manufacturing requirements also affect international trade and thus shape freight patterns. The long-term impact of global trade on carbon This has led to more frequent and smaller freight dioxide (CO2) emissions has been largely ignored. shipments and, as a result, to less full containers, International trade contributes to global CO2 2 8132 Mt CO2 emissions 2108 Mt om eight = 30% 7% of all transport-related of global CO2 emissions from fuel CO2 emissions combustion Freight Freight 2010 2050 The issue CO2 emissions from global freight transport are set to increase fourfold emissions mainly through freight transport. The trade-related freight transport are estimated to be International Transport Forum (ITF) estimates 2 108 million tonnes (Mt) and could rise to that international trade-related freight transport 8 131 million tonnes under the baseline scenario. currently accounts for around 30% of all transport- related CO2 emissions from fuel combustion, and A nearly fourfold increase would seriously more than 7% of global emissions. undermine climate goals. Assessing how changing trade patterns will affect future CO2 emissions Projections based on the ITF’s International Freight is important in establishing whether policies are Model foresee an increase of trade-related freight aligned across the supply chain to achieve climate transport emissions by a factor of 3.9 to 2050. change mitigation objectives. In the base year 2010, global emissions from The Carbon Footprint of Global Trade - © OECD/ITF 2015 3 Production/ Freight mode Value to weight Global transport OECD + consumption + choice + conversion + network = ITF Trade Projections centres Freight Projections ↘ Projections on ‣ 19 product groups ‣ Includes multimodal routes ‣ In tonne-kilometre ‣ All ports, train stations, routes, ↘Assigment future global ‣ 26 zones ‣ Includes economic profile ‣ By origin-destination pair ‣ Links between modes of freight volume trade in value terms ‣ 294 centroids ‣ Includes direct borders, ‣ Dwelling times to routes by transport modes covering 2 539 cities trade agreements The approach From global trade value to international freight volumes Standard projections of future global trade are model assigns the transport mode (sea, air, road, expressed in value terms and do not take account rail) used for trade between each origin-destination of the physical transport activity involved. The ITF pair by product group. The model is calibrated using International Freight Model projects international European and Latin American data on trade by mode freight transport activity and related CO2 emissions for different products and also takes into account up to 2050 under alternative trade liberalisation travel time and distance between trading partners scenarios. The model expresses future trade in value as well as the existence of trade agreements and a and volume (in USD, tonnes and tonne-kilometers) land border between trading countries. and assigns freight volumes to actual routes by transport mode - thus also enabling the calculation Third, a weight-to-value model, calibrated again of related CO2 emissions. with European and Latin American trade data on value/weight ratios for different commodities, The starting point of the ITF model is OECD is applied to obtain freight volumes from trade projections for international trade at the level of 26 projections. Again, the model takes into account regions and 19 product groups. To obtain a realistic travel time and distance, trade agreements, land picture of how these trade projections translate into borders and common languages — among other freight movements, four additional layers are built things — as explanatory variables for trade between into the model: First, trade flows are disaggregated different countries for each commodity. Economic into production and consumption centres around the profile variables are also included to describe trade world, representing pair-wise trade flows between relations between countries with different production nearly 300 such “centroids”. Second, a mode choice sophistication and intensity of trade. 4 Production/ Freight mode Value to weight Global transport OECD + consumption + choice + conversion + network = ITF Trade Projections centres Freight Projections ↘ Projections on ‣ 19 product groups ‣ Includes multimodal routes ‣ In tonne-kilometre ‣ All ports, train stations, routes, ↘Assigment future global ‣ 26 zones ‣ Includes economic profile ‣ By origin-destination pair ‣ Links between modes of freight volume trade in value terms ‣ 294 centroids ‣ Includes direct borders, ‣ Dwelling times to routes by transport modes covering 2 539 cities trade agreements The approach From global trade value to international freight volumes Finally, the resulting trade by mode in tonnes of of production or consumption to (or from) ports goods moved by product group is assigned to are a significant element of international freight. a global freight transport network model. This However, this domestic share of international trade- consolidates all freight networks in the world based related freight is not accounted for in previous on open GIS data. It includes all world highways and global freight models. Linking the information on main roads, rail stations and networks, sea ports global production and consumption centres with and actual routes as well as airports and commercial the global freight network model enables the ITF flights in a routable intermodal network connecting International Freight Model to estimate the domestic all production and consumption centres around the share of international freight for a country, providing world. Each seaport and airport is connected to road insights into how an important segment of the and rail networks with intermodal dwelling times, freight journey can be shaped by domestic transport reflecting the multimodal nature of most freight policies. journeys. The model also includes differentiated speed for each link and border crossing times. For the first time, the ITF International Freight Model allows the calculation of the domestic share of international trade and the CO2 emissions associated with it. Contrary to common modeling approaches, trade does not stop at ports. Goods transported by road or rail from (or to) centres The Carbon Footprint of Global Trade - © OECD/ITF 2015 5 More freight, more CO2 International trade-related freight and associated emissions by corridor +403% +332% +270% +191% 2010 2050 +374% 2010 2050 +273% Europe Asia 2010 2050 North America +280 +195 2010 2050 North Atlantic 2010 2050 Mediterranean and Caspian Sea 2010 2050 North Pacic +715% +689% 2010 2050 +406% +315% Africa 2010 2050 2010 2050 South Pacic South America 2010 2030 Freight Volumes CO2 Emissions 2010 2050 (billion tonne-km) (million tonnes) Indian Ocean Oceania 2010 2050 South Atlantic 6 +403% +332% +270% +191% 2010 2050 +374% 2010 2050 +273% Europe Asia 2010 2050 North America +280 +195 2010 2050 North Atlantic 2010 2050 Mediterranean and Caspian Sea 2010 2050 North Pacic +715% +689% 2010 2050 +406% +315% Africa 2010 2050 2010 2050 South Pacic South America 2010 2030 Freight Volumes CO2 Emissions 2010 2050 (billion tonne-km) (million tonnes) Indian Ocean Oceania 2010 2050 South Atlantic The Carbon Footprint of Global Trade - © OECD/ITF 2015 7 The insights How shifting trade patterns increase freight volumes and CO2 The elasticity of world trade to world GDP has fallen Distances on the traditional routes between developed since the start of the economic crisis in 2008 and economies will grow relatively slowly, whereas the world trade growth has been slower than before. The hauling distances in the trade corridors connecting lower responsiveness of trade to GDP reflects partly emerging economies lengthen nearly 20% on average. the sluggishness of GDP but also structural shifts – In terms of freight volumes, the North Pacific route will especially a slowing down in the global value chains’ surpass the North Atlantic as the main freight corridor fragmentation and increases in the domestic value- by 2050, reflecting an increasing flow of goods added component in the exports of low and middle- between North America and Asia. income economies. The underlying trade projections up to 2050 assume that GDP will grow on average Growth in trade will result in significant emission around 3% per year with declining rates in many growth unless action is taken. Even assuming
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