concepts on input-output model theory

In order to fully understand the connection between international trade and the environment, the research makes use of principles from input-output model theory. South Korea is listed in the document as one of the nations whose economies are impacted by the rise in carbon dioxide emissions each year. The input output theory's fundamental formula and its derivations are described in detail in the publication. The derivations are extensively used to illustrate how a country's import and export rules impact the likelihood that it may experience emissions. It has been discovered that the numerous industries in the area are what cause the carbon IV oxide emissions in South Korea. The paper also gives the remedies that can be employed to ensure that the emissions are reduced in South Korea.

The Effect of International Trade on Korea’s Environment

It is true that the establishment of the international trades would involve linking of the consumption of a certain area to the emissions of a different area. Maintaining a clean environment has been a major topic for debate among the policies that govern the international trade (Cho, p 40). The increasing economy of the world has also demanded for maintenance of good environment among the members of different countries. The production techniques that do not influence the surrounding environments can be said to be a win-win situation for the economic growth all over the world. Maintenance of clean environment is a norm. Several investors find it difficult to conform to the maintenance of the environmental needs. Those who oppose globalization have the fear that if no strict rules have been made concerning maintenance of production, then the environment is likely to be destroyed as the business people might involve in the harmful businesses. Developing countries have been noted to have less strict rules in order to attract more foreign investors into their countries thus destroying their environments. There have been researches to try determining the effects of openness to trade in the environment at the end of the period. Some researchers found out that the restrictive policies have a great impact on the increase in environmental pollution. However, they still acknowledge that less strict policies still have effect on the pollution of the environment. The income increase is determined with the increase in the globalization of the international trades. The globalization of trades has great chances of creating great pollution to the environment. Unfortunately, the relationship between the income of individuals and the effects on environmental pollution has never been fully explored. This paper utilizes the Leontief´s input output model to try explaining the emissions that have been occurring in South Korea in the recent years.

Understanding the relationship between the trade and the environmental effects has been the main topic of interest in the past few years. The first study to determine the effects of trade on the environment had been recorded to have taken place in the United States about forty years ago. Studies on the effects on the trade on the environmental emissions in most instances normally check on the effects of the imports and exports on the environments of the targeted countries. The studies have also been done in other European countries like Germany and England. The effects of the trade on the environments have been studied using various different technologies. However, the methodologies normally compare the effects of trades with various countries that are considered to be at the same level technologically. The data availability for the studies helps in ensuring that more sophisticated models are used in explaining the impacts of trade on the emission at both the consumer and the producer levels.

Input-Output Theory model

The input-output analysis is a methodology that is used in quantitative economics. The system tries to portray macroeconomics as an activity system that relates various aspects of goods and services. The analysis normally involves determining the production of goods and services in relation to the consumption of particular goods and services by various individuals (Serrano p 15). The Input-output technique is normally regarded as a vast collection of various data’s that is essential in description of various economic systems and giving predictions of various economic systems. The basic equation for the theory goes as:

 (1)

Where，，

，

Thence, matrix one can be expressed as (2)



We take the world economy to be having two main regions that are named region one and two (Serrano p 16). The two regions are considered to have different economic relationships between the trade and their pollution behaviours.

Simplifying the equations further,

(3)



To establish the relationships between trades and the emissions between the international trades and the emissions produced by various countries, more equations can be derived further as follows.

(4)



(5)



(6)



(7)



If the equations 4 and 5 are taken to be the pollutants that South Korea exports or takes in, then equation 6 represents the net amount of pollution that is taken in by the country at the end of the trade (Frankel 17). A good international trade should be able to balance the emissions that come with the exports and imports within various countries. In case the coefficient of 6 exceeds zero, then South Korea exports more emissions than it imports (Hamilton 18). If the value becomes less than one, then the countries takes in more emissions than it exports. The balance is reinstated if the coefficient in the calculation ends up being zero. If the amount is of emissions from the pollutions are calculated and the overall amount of the calculation becomes positive or negative, then the international trade regulators need to take a lot of focus on the way the country trades its goods.

In close examination of the effects of trade on the environment, it is true that the trades that South Korea get involved in may either have positive or negative impacts on the environment (Serrano p 15). To be clear, the countries that fear the international business competitions are likely to get involved in businesses that have great adverse effects on their environments as compared to the countries that do not care about the competitions that they might be facing every day are less likely to suffer from environmental hazards (Hamilton 18). The countries that have strict rules are more likely to form the corporate regulations that ensure that individuals follow before they engage in any form of business that might affect the results in equation six. Openness to the forms of trade that various individuals in the country engage in is likely to allow room for individuals to engage in dirtier business that can lead to the spoiling of the business. The international trade regulations ensure that individuals only get involved in the businesses that are good for the maintenance of the environments of the country.

The techniques of globalization have its own ways of ensuring that the pollution is distributed among the countries that engage in trade. The aspects of globalization ensure that the issues that surround pollution are averagely distributed among the countries that involve in the trades (Frankel 17). The controlling of the trade ensures that the environment within the various countries including South Korea is as clean as possible. It provides the most effective solution that can aid in the governance of the country at the national level. It is globally estimated that the national trade interventions help in regulations of various emissions in the whole world. However, the carbon IV oxide and the Carbon II oxide emissions are not well regulated within the various countries of the world and they require strict rules to ensure that they are regulated in South Korea (Frankel 17). Carbon IV oxide turns out to be among the problems that are relatively difficult to regulate following the methods of cooking that are involved in the current societies in the world with South Korea included. People in most instances cook using the hydrocarbons which normally undergo combustion give carbon IV oxide which has a great impact on the environment. The carbon IV oxide accumulation turns out to be the major cause of global warming in the world. Global warming poses a major threat to the environment that grossly affects the agricultural sectors. The accumulation of the carbon IV oxide may lead to the formation of the acidic rains that greatly affects the soils. The plants need a balance of the acidic and the basic environments for them to grow.

Carbon IV oxide is also slightly acidic and this greatly affects the respiratory system of human beings if they inhale the gas directly into their respiratory system. Te acidic nature of the gas corrodes the respiratory surfaces making them inflamed and thus may block the air flow and eventually lead to death. Global warming also increases the temperatures of a particular region which may result in the climatic changes after certain period of times.

The gaining of more emissions than what the country exports can be considered as a loss to the country if the trade between the two countries has been evaluated. The calculations in the Input Output model actually give the emission and the economic trade relationships have an economic meaning that really need to be evaluated whenever a country gets engaged in the trades. The South Korean government has recorded a significant increase in the amount of carbon IV oxide that it emits yearly. In 2010, the country recorded an increase by about nine percent of the carbon IV oxide. The percentage had been recorded to have decreased by a very small percentage in 2012 which was then elevated in 2015 (Serrano p 18). In terms of the input and output model, the country recorded a significant loss in the trades that it was involved in. A good trade should involve an emission level of zero or a decrease in the amount of emissions as that which was recorded in 2012.

In the analysis of the increase in the amount of emissions of Carbon Dioxide in South Korea, it can be said that the consumption of the products that release Carbon Iv oxide has increased significantly. The countries have not checked on the regulations that govern the imports of the products that lead to carbon IV oxide emissions like the vehicles that use fuels. The major cause of the increase in the amount of carbon IV oxide produced in South Korea is the increased usage of fossil fuels in the country (Cavusgil p 13). The country should opt adopting the electricity systems in the various activities that need heat to be performed. The economy of South Korea which is ranked to be among the top economies in the world is said to depend majorly on the industrial sectors. The industries in South Korea are said to depend majorly on coal. Coal makes the lions share on the total carbon iv oxide produced by the country.

The changes in the emissions also affect the policies that govern the climatic changes in the world. The emission may also regulate the policies that govern the aspects of global trades all over the world. The country needs to check keenly on the imports that they make to ensure that they cut on the amount of emissions of carbon oxide that they produce yearly. It is the responsibility of the country to ensure that it minimizes its emissions according to the recommendations of the Kyoto protocols (Serrano p 15). The United Nations recommends that the countries comply with the requirements of ensuring that the surrounding environment is maintained away from the environmental pollutions. The regulation of industrial activities should be regulated through the experts in the field to ensure that the regulations are perfectly done. Politicians are not recommended in the regulation of the global trades in their specific regions. Politicians are greatly vulnerable to the pressures that may influence their final decisions concerning the operations of the global trade requirements within their countries.

The regulations that are outlined by the country should aim at regulating the costs that are incurred in terms of the Input –output model. The country should opt regulating the imports and the exports of the country. This can be regulated by reducing the permits that allow the importation of the fossils in the country (Serrano p 15). The country can also increase the number of permits that allow for the exportation of the fossil produces to ensure that the accumulation of carbon IV oxide in the regions reduces. The penalties that govern the illegal importation of the fossil fuels should also be regulated to ensure that individuals do not get involved in the importation of the products illegally at any given instance. The country should also opt in engaging in the industries that do not exclusively depend on the fossil fuels to ensure that the economy of the region is made strong.



















Works Cited

Cavusgil, S. Tamer, et al. International business. Pearson Australia, 2014.

Cho, Yongsung, Won W. Koo, and Jungho Baek. The Environmental Consequences of Globalization: A Country-Specific Time Series Analysis. No. 1187-2016-93833.

Frankel, Jeffrey A. "Environmental effects of international trade." (2009).

Hamilton, Leslie, and Philip Webster. The international business environment. Oxford University Press, USA, 2015.

Serrano, Mònica, and Erik Dietzenbacher. "Responsibility and trade emission balances: An evaluation of approaches." Ecological Economics 69.11 (2010): 2224-2232.