In document Schwerpunkt Außenwirtschaft 2019/2020 (Page 131-137)

IMF (2009), Balance of Payments and International Investment Position Manual; Sixth Edition (BPM6); Washington 2009.

OECD (2008), Benchmark Definition of Foreign Direct Investment; Fourth Edition (BD4); OECD, 2008.

0 5 10 15

0 5 10 15

1995 2005 2015

Erträge (linke Achse) Rendite (rechte Achse) Aktive Direktinvestitionen

in Mrd EUR in %

Erträge aus Direktinvestitionen

Quelle: OeNB.

0 5 10 15

0 5 10 15

1995 2005 2015

Passive Direktinvestitionen

in Mrd EUR in %

Grafik 10

0 5 10 15

1995 2000 2005 2010 2015

Höhere Rendite Passive DI Höhere Rendite Aktive DI

Renditevergleich ADI vs. PDI

in %

Quelle: OeNB.

Grafik 11

131 UNCTAD (2020a), World Investment Trends Monitor No. 33; January 2020; New York

and Geneva 2019.

UNCTAD (2020b), World Investment Trends Monitor No. 34; March 2020; New York and Geneva 2020.

UNCTAD (2020c), World Investment Trends Monitor No. 35; March 2020; New York and Geneva 2020.

Austrian foreign direct investment – recent developments

Facing the unfolding coronavirus crisis, 2019 is likely to mark new all-time records in FDI stocks for a while, both, globally and in Austria. Global net inflows remained stable on post financial crisis level which can be observed since 2008.

The economic disruption of the pandemic is likely to hit FDI flows hard in 2020, and potentially also in upcoming years. Austria’s inward (183.0 bn EUR) and out-ward FDI stocks (208.8 bn EUR) hit record highs once again. Foreign investors generally introduced only smaller additional FDI funds into Austria, while on the other hand, a couple of domestic multinationals made headlines with remarkable projects that led to strong outward FDI flows.

JEL Code: F21

Spezialthema: Internationaler Handel und nachhaltige Entwicklung

Special topic: International trade

and sustainable development

Trade can unlock green growth potential

Ankai Xu and Robert Koopman1

International trade has expanded significantly in recent decades. In terms of vol-ume, world trade in 2018 was about 40 times greater than it was in 1950. The fact that an ordinary consumer in Europe can purchase an apple from New Zealand, an avocado from Mexico, a gaming console made in Japan and clothes from Bangla-desh is a remarkable sign of how trade has shaped our lives. This unprecedented expansion of international trade coincided with an observed acceleration in cli-mate change and environmental degradation in some regions. This temporal cor-relation raises the question: how does trade openness impact the environment?

The relationship between trade, economic growth and environmental outcomes is complex as it involves a number of trade-offs.

There is an extensive literature on the environmental effects of trade liberaliza-tion. In this chapter, we highlight the main insights from the literature supporting the overall conclusion that trade in itself is not a cause of environmental degrada-tion; and that, to the contrary, trade often plays a vital role in tackling environmen-tal challenges and combating climate change. Trade will likely continue to play an important role in generating and diffusing green technologies to unlock the global green growth potentials.

1 The environmental footprint of trade

International trade allows goods to be produced in one location and consumed in another, which often leads to an efficient use of the world’s limited resourc-es. In many cases, international trade results in a net reduction of the use of natural resources.

For instance, in the absence of international trade, the production of agricul-tural and other products needed to meet current levels of consumption would require more water. The trade in “virtual” water embedded in the production of commodities has been advocated as a policy tool to overcome the water shortage in some water-scarce regions.2 A water-scarce country, for instance,

1 Xu and Koopman are in the Economic Research and Statistics Division of the World Trade Organization. The opinions expressed in this paper are those of its authors.

They are not intended to represent the positions or opinions of the WTO or its mem-bers and are without prejudice to memmem-bers’ rights and obligations under the WTO.

Any errors are attributable to the authors.

2 Due to climatic and technological differences, the amount of water resources requi-red to produce the same amount of agriculture products can vary significantly in different locations. It takes about 2000 cubic meters of water to produce one ton of wheat in the middle east, while producing the same amount of wheat in west Europe would take only 500 cubic meters of water (Mekonnen & Hoekstra, 2011).

136 Trade can unlock green growth potential

could import products that require large amounts of water for their produc-tion (water-intensive products) and export products or services that require less water, thus relieving the pressure on the country’s own limited water resourc-es. Estimates suggest that the reallocation of agricultural products through in-ternational trade amounts to a global reduction of water use. Mekonnen and Hoekstra (2011) estimate that, if all imported agricultural products were pro-duced domestically, the total amount of water that would have been required to produce them would be 369 billion cubic meters more, equivalent to 4% of the global water footprint related to agricultural production.

Another pertinent example is greenhouse gas emissions associated with in-ternational trade. The carbon footprint of trade, expressed as net emissions of carbon dioxide (CO2) and other greenhouse gas equivalent in tons of CO2 at-tributed to international trade, is much smaller than conventionally estimated.

Studies trying to account for the carbon footprint of international trade typi-cally suggest that about 20 to 25 percent of global carbon emissions are re-quired to produce the goods and services that are traded internationally. This accounting approach measure, the carbon emission “embedded” in interna-tional trade and suggests that industrialized countries “import” more emissions and developing countries “export” more emissions (Fernández-Amador, Fran-cois, & Tomberger, 2016; Hertwich & Peters, 2009). What these studies fail to account for, however, is that without international trade, domestic production would increase to meet domestic consumption needs. Thus halting internation-al trade would not eliminate one fifth to a quarter of greenhouse gas emissions, since domestic products would take the place of imported products, and would in themselves be a source of emissions.

A more rigorous approach to measure the global carbon footprint of inter-national trade examines carbon emissions from transportation and production as a result of trade opening compared to a situation without trade (autarky).

Following this approach, Shapiro (2016) estimates that international trade in-creases global emissions by 5 percent or 1.7 gigatons of CO2 annually, and that this effect is almost equally driven by production and transportation. The study also points out that the global gains from international trade from increased va-rieties at lower costs is $5.5 trillion annually, equal to 10 percent of global GDP.

Thus the gains from international trade exceed the environmental cost arising from CO2 emission by a factor of 161 (Shapiro, 2016).

2 Trade openness increases the demand for a cleaner

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