Giovani Machado

Energy and carbon embodied in the international trade of Brazil: an input–output approach

Abstract All goods and services produced in an economy are directly and/or indirectly associated with energy use and, according to the type of fuel utilized, with CO2 emissions as well. International trade is an important factor in shaping the industrial structure of a country and, consequently, in affecting a countrys energy use and CO2 emissions. This study applies input–output techniques to the Brazilian economy to evaluate the total impacts of international trade on its energy use and CO2 emissions. A commodity-by-industry IO model in hybrid units (energy commodities in physical units and non-energy commodities in monetary units) is applied to the Brazilian economy in 1995. Results show that total energy embodied in the exports of non-energy goods of Brazil equals 831 PJ, while total carbon embodied is 13.5 MtC. These amounts are larger than the relevant amounts embodied in the imports of non-energy goods, respectively 679 PJ and 9.9 MtC. These figures are better understood by contrasting them with the total energy use and the corresponding total carbon emissions of the Brazilian economy in 1995 estimated by this work: 6781 PJ and 99.4 MtC, respectively. This means that international inflows and outflows of energy embodied in non-energy goods are in the order of 10 and 12% of the total energy use, while inflows and outflows of carbon embodied in non-energy goods are approximately 10 and 14% of the corresponding total carbon emissions of the Brazilian economy in 1995. The general picture is that Brazil is not only a net exporter of energy (153 PJ) and of carbon (3.6 MtC) embodied in the non-energy goods internationally traded by the country in 1995, but also that each dollar earned with exports embodied 40% more energy and 56% more carbon than each dollar spent on imports. These findings suggest that Brazilian policy-makers should be concerned about the extra impacts international trade policy may have on energy use and carbon emissions of the country.