# **_4.2. Emissions implications_**

Finally, the impact on emissions would be modest. Table 13 highlights the potential impact on emissions—both greenhouse gases and those more associated with local pollutants and concomitant health impacts. The Envisage model tracks the emissions of 14 gases.<sup>12</sup> Four are socalled greenhouse gases (GHGs),<sup>13</sup> that are most linked with radiative forcing and global warming. The remaining 10 are mostly local pollutants with potentially significant health effects—but can also interact with the GHGs and have an impact on climate change. For example, sulfur dioxide in the atmosphere lowers radiative forcing and thus acts to cool the atmosphere. In Envisage, carbon dioxide (CO2) emissions emanate exclusively from the combustion of fossil fuels—thus the model does not track changes from land-use changes (e.g. deforestation), or process emissions (e.g. from cement manufacturing). The remaining 13 gases are generated from three sources: 1) intermediate and final demand for goods and services; 2) factor use (e.g. land in rice production, or herds in livestock); and 3) output (such as methane emissions from landfills).

The change in the pattern of emissions generated by the BRI scenarios will reflect a complex constellation of factors—that can be broken into scale effects (e.g. change in GDP), technique effects (e.g. changes in input mix), and composition effects (e.g. changes in the structure of output within and across countries). Technique effects are likely to remain small as there are no explicit policies that are targeting emissions, i.e. the only changes in relative prices are coming from the trade policy changes including those linked to BRI. Moreover, most inputs are assumed to be consumed in fixed quantities. All else equal, the scale effects should line up with increases in GDP on a country basis. The composition effects are likely to be large as policies engendered by BRI lead to changing comparative advantage with significant changes in both the internal and external composition of output. These are not necessarily easy to trace in a modeled economy with many sectors and countries. If production moves to relatively ‘clean’ sectors and countries, the composition effects may counteract the scale effects, or vice versa.

Figure 2 provides an overall picture for the changes in emissions at the global level from the BRIUB scenario. GDP growth is some 0.12%, thus this scenario suggests that for most gases, the composition effect dominates the scale effect. There are some notable exceptions—F-gases, NMVB, and SO2. F-gases are linked in particular to electronics manufacturing, thus this suggests that re-allocation of electronics manufacturing would lead to somewhat cleaner production. SO2 is often related to coal-based electricity production. A decline in SO2 would bring some health benefits.

> 12 Emissions covered in Envisage include: Greenhouse gases: Carbon dioxide (CO2), Nitrous oxide (N2O), Methane (CH4), F-gases (HFCs, PFCs, SF6, NF3) and Other gases: Black carbon (BC), Carbon monoxide (CO), Ammonia (NH3), Non-methane volatile organic compounds short carbon cycle (NMVB), Non-methane volatile organic compounds long carbon cycle (NMVF), Nitrogen oxides (NOx), Organic Carbon (OC), Particulate matter 10 (PM10), Particulate matter 2.5 (PM2.5) and Sulfur dioxide (SO2). 13  Also referred to at times as the Kyoto gases as they were targeted in the Kyoto Protocol Agreement, signed in 1997.

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