This article analyzes the role of dynamic economic resilience in relation to recovery from disasters in general and illustrates its potential to reduce disaster losses in a case study of the Wenchuan earthquake of 2008. We first offer operational definitions of the concept linked to policies to promote increased levels and speed of investment in repair and reconstruction to implement this resilience. We then develop a dynamic computable general equilibrium (CGE) model that incorporates major features of investment and traces the time-path of the economy as it recovers with and without dynamic economic resilience. The results indicate that resilience strategies could have significantly reduced GDP losses from the Wenchuan earthquake by 47.4% during 2008-2011 by accelerating the pace of recovery and could have further reduced losses slightly by shortening the recovery by one year. The results can be generalized to conclude that shortening the recovery period is not nearly as effective as increasing reconstruction investment levels and steepening the time-path of recovery. This is an important distinction that should be made in the typically vague and singular reference to increasing the speed of recovery in many definitions of dynamic resilience.
In the 2000s, the rapid growth of CO2 emitted in the production of exports from developing to developed countries, in which China accounted for the dominant share, led to concerns that climate polices had been undermined by international trade. Arguments on “carbon leakage” and “competitiveness”—which led to the refusal of the U.S. to ratify the Kyoto Protocol—put pressure on developing countries, especially China, to limit their emissions with Border Carbon Adjustments used as one threat. After strong growth in the early 2000s, emissions exported from developing to developed countries plateaued and could have even decreased since 2007. These changes were mainly due to China: In 2002–2007, China's exported emissions grew by 827 MtCO2, amounting to almost all the 892 MtCO2 total increase in emissions exported from developing to developed countries, while in 2007–2012, emissions exported from China decreased by 229 MtCO2, contributing to the total decrease of 172 MtCO2 exported from developing to developed countries. We apply Structural Decomposition Analysis to find that, in addition to the diminishing effects of the global financial crisis, the slowdown and eventual plateau was largely explained by several potentially permanent changes in China: Decline in export volume growth, improvements in CO2 intensity, and changes in production structure and the mix of exported products. We argue that growth in China's exported emissions will not return to the high levels during the 2000s, therefore the arguments for climate polices focused on embodied emissions such as Border Carbon Adjustments are now weakened.
Plain Language Summary
In the 2000s, CO2 emissions from production in developed countries flattened while emissions from their consumption grew. The rapid growth of exported emissions from developing countries to developed countries, with the largest contribution from China, played a significant role. This led to concerns that climate polices had been undermined by rapid growth in international trade. Since around 2007, growth in these exported emissions has plateaued, predominantly due to changes in China. Our study investigates China's changes, demonstrating that in addition to the effects of global financial crisis, China implemented potentially permanent structural changes. We argue that China's exported emissions are unlikely to return to the growth levels from the 2000s, and therefore trade‐related climate polices will be much less relevant.
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