The relationship between trade and sustainable transport: A quantitative assessment with indicators of the importance of environmental performance and agglomeration externalities

This paper analyses the effect of international trade, environmental performance and agglomeration externalities on CO2 emissions arising from goods transport. It is an indicator that could be used for monitoring progress on the integration of the principles of sustainable transport into national policies. Firstly, we calculate a global transport emissions indicator using existing CO2 emission data. Secondly, given that sea transport is on average less polluting than terrestrial and air transport with regards to greenhouse gas emissions, we calculate a trade-weighted distance indicator that allows for the relative growth of maritime exports. Thirdly, we analyse the relationship between trade and global transport emissions based on existing environmental performance levels by examining both a narrow and a broad environmental performance indicator. Lastly, we examine the role of agglomeration externalities. Comparing different regions within Spain and their trading partners over the period 2000-2008, we are able to plot two different shapes to represent the relationship between trade and global transport emissions, one of which is an inverted-U shape that represents trade with trading partners with a lower environmental performance. Our results show that environmental performance reduces trade-related global transport emissions. Negative externalities for the environment derived from transport facilities agglomeration co-exist too, although these might be partially offset by national regulations that ensure commitment towards a clean environment.