ENV IR ONMENTAL POLIC IES AND TR ADE
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TABLE 5.1 Changes in Output Following the Implementation of Nationally Determined Contributions, by Sector and Region Most affected sector
Second-most affected sector Sector
Third-most affected sector
Region
Sector
Change (%)
China
Coal extraction
−6.0
Gas extraction and distribution
Change (%)
−3.0
Wearing apparel and leather products
Sector
Change (%)
−0.2
East Asia and Pacific
Air transport
−10.6
Coal extraction
−8.6
Other transport
−5.8
Europe
Coal extraction
−33.2
Air transport
−2.5
Gas extraction and distribution
−2.2
Europe and Central Asia
Coal extraction
−15.7
Gas extraction and distribution
−1.1
Nonmetallic minerals
−0.6
Latin America and Caribbean
Coal extraction
−18.3
Gas extraction and distribution
−3.3
Refined oil
−1.3
Middle East and North Africa Coal extraction
−5.7
Gas extraction and distribution
−0.3
Wearing apparel and leather products
−0.2
Rest of high-income countries
Coal extraction
−18.5
Gas extraction and distribution
−3.3
Textiles
−1.2
South Asia
Coal extraction
−6.1
Wearing apparel and leather products
−0.4
Gas extraction and distribution
−0.4
Sub-Saharan Africa
Coal extraction
−8.9
Gas extraction and distribution
−0.2
Meat products (including fisheries) and other food
−0.2
United States
Coal extraction
−25.0
Gas extraction and distribution
−4.9
Other transport
−0.5
World
Coal extraction
−10.9
Gas extraction and distribution
−2.2
Air transport
−0.9
Sources: World Bank calculations; Chepeliev et al. 2021. Note: The “other transport” sector refers to water and ground transport. For each region, the top three sectors with the largest reduction in output are shown. Percentage changes indicate the corresponding change in output in 2030 relative to the post-COVID baseline.
being the world’s largest net importer of fossil fuels and having a relatively low carbon price consistent with its NDC target, experiences an increase in imports of fossil fuel commodities. Both East Asia and Sub-Saharan Africa, being large net energy exporters, experience a reduction in exports of fossil fuels. In the case of Sub-Saharan Africa, the reduction in fossil fuel exports is compensated for by an increase in exports of other goods and services, including agricultural commodities. Implementation of the European Green Deal will likely have moderate negative impacts on the real per capita incomes of the EU’s trading partners beyond those related to the NDCs. These impacts will be driven by two key factors. First, the significantly higher carbon price in the EU (from US$39 per ton of CO2 under the NDC target to US$213 per ton of CO2 under the European Green Deal target) will substantially reduce demand for fossil fuels within the EU. This reduction in demand will adversely affect the Middle East and North Africa and the Central Asia regions, including the Russian Federation, as the EU is a primary destination of their fossil fuel exports (figure 5.2). The higher price of carbon will make production of energyintensive products more expensive in the EU, which will have a negative effect on exports of such products. Second, implementation of the CBAM will further reduce
