Climate Change and Trade Facilitation: Estimating Greenhouse Gas Emission Savings from Implementation of Cross-Border Paperless Trade in Asia and the Pacific

Abstract

The Framework Agreement on Facilitation of Cross-Border Paperless Trade in Asia and the Pacific entered into force in February 2021. While economic benefits associated with paperless trade facilitation are well known, little attention has been paid to measuring the potential environmental benefits. Accordingly, this article sets out to quantify the amount of greenhouse gas emissions that could be saved if all trade-related paper documents in the region are ultimately replaced by digital documents and data exchange, as foreseen in the regional framework agreement. This is carried out by combining detailed descriptions of trade transactions, data on trading volumes and relevant emission factors. Even with conservative assumptions, the emissions saved by fully digitalising a single end-to-end trade transaction are equivalent to planting 1.5 trees. For the Asia-Pacific, this implies savings of about 13 million tons of CO2e annually, equivalent to the carbon absorbed by 400 million trees. The results are driven by efficiency gains from handling data digitally rather than by the direct savings of paper and ink. JEL Codes: F18, H83, Q56