The flow of pollution through international trade flows has the ability to undermine environmental policies, particularly for global pollutants. In this article we determine the CO2 emissions embodied in international trade among 87 countries for the year 2001. We find that globally there are over 5.3 Gt of CO2 embodied in trade and that Annex B countries are net importers of CO2 emissions. Depending on country characteristics—such as size variables and geographic location—there are considerable variations in the embodied emissions. We argue that emissions embodied in trade may have a significant impact on participation in and effectiveness of global climate policies such as the Kyoto Protocol. We discuss several policy options to reduce the impact of trade in global climate policy. If countries take binding commitments as a part of a coalition, instead of as individual countries, then the impacts of trade can be substantially reduced. Adjusting emission inventories for trade gives a more consistent descr...

CO2 embodied in international trade with implications for global climate policy.

From production-based to consumption-based national emission inventories

This article provides an overview of how generalised multi-regional input–output models can be used for carbon footprint applications. We focus on the relevance and suitability of such evidence to inform decision making. Such an overview is currently missing. Drawing on UK results, we cover carbon footprint applications in seven areas: national emissions inventories and trade, emission drivers, economic sectors, supply chains, organisations, household consumption and lifestyles as well as sub-national emission inventories. The article highlights the multiple uses of generalised multi-regional input–output models for carbon footprinting and concludes by highlighting important avenues for future research.

Input–output analysis and carbon footprinting: an overview of applications

For the long-term stabilization of greenhouse gas (GHG) concentrations it is important that post-Kyoto policy has broad participation to ensure environmental integrity. Many post-Kyoto frameworks have been debated, but surprisingly approaches that focus on consumption have received little attention in the climate change literature despite broader interest in other areas. In this article we extend the argument for constructing GHG inventories using a country’s consumption rather than production. First, we argue that constructing GHG inventories using a country’s economic activity instead of geographic territory solves allocation issues for international activities such as international transportation and carbon capture and storage. Second, we argue that consumption-based GHG inventories have many advantages over production-based inventories. The main advantages are to address carbon leakage, reduce the importance of emission commitments for developing countries, increase options for mitigation, encourage environmental comparative advantage, address competitiveness concerns, and naturally encourage technology diffusion.

Post-Kyoto greenhouse gas inventories: production versus consumption

. In a globalised world, the transfer of carbon between regions, either physically or embodied in production, represents a substantial fraction of global carbon emissions. The resulting emission transfers are important for balancing regional carbon budgets and for understanding the drivers of emissions. In this paper we synthesise current understanding in two parts: (1) CO2 emissions embodied in goods and services that are produced in one country but consumed in others, and (2) carbon physically present in fossil fuels, petroleum-derived products, harvested wood products, crops, and livestock products. We describe the key differences between studies and provide a consistent set of estimates using the same definitions, modelling framework, and consistent data. We find the largest trade flows of carbon in international trade in 2004 were fossil fuels (2673 MtC, 37 % of global emissions), CO2 embodied in traded goods and services (1661 MtC, 22 % of global emissions), crops (522 MtC, 31 % of total harvested crop carbon), petroleum-based products (183 MtC, 50 % of their total production), harvested wood products (149 MtC, 40 % of total roundwood extraction), and livestock products (28 MtC, 22 % of total livestock carbon). We find that for embodied CO2 emissions, estimates from independent studies are robust, and that differences between individual studies are not a reflection of the uncertainty in consumption-based estimates, but rather these differences result from the use of different production-based emissions input data and different definitions for allocating emissions to international trade. After adjusting for these issues, results across independent studies converge to give less uncertainty than previously assumed. For physical carbon flows there are relatively few studies to be synthesised, but differences between existing studies are due to the method of allocating to international trade, with some studies using "apparent consumption" as opposed to "final consumption". While results across studies are sufficiently robust to be used in further applications, more research is needed to understand differences and to harmonise definitions for particular applications.

https://bg.copernicus.org/articles/9/3247/2012/bg-9-3247-2012.pdf

A synthesis of carbon in international trade

The international handbook on integrated environmental and economic accounting (SEEA-2003) provides a detailed overview of environmental accounting approaches that have been developed in parallel with the system of national (economic) accounts. In addition to natural resource stock accounts and environmental protection expenditure accounts, SEEA-2003 pays considerable attention to physical flow accounting. Expanding the national economic accounts with physical data sets facilitates the joint analysis of environmental and economic policy issues. This article discusses the main characteristics of national accounts-oriented physical flow accounting approaches and provides an overview of the kind of indicators they may put forward. Although this article is not an attempt to provide a comprehensive review of macrooriented physical flow accounting approaches, the analytical advantages of national accounts-oriented physical flow accounts are illustrated.

The System of Environmental and Economic Accounts—2003 and the Economic Relevance of Physical Flow Accounting

An environmental performance index for products reflecting damage costs

We assess environmental performance across product types and across household types in order to evaluate environmental pressure from human activities. To so do, we combine family budget statistics, input–output tables, energy and material flow matrices, various types of emissions and environmental effects indices for various effect types (e.g. a global warming potential index, an ozone depletion potential index, etc). Subsequently, using DEA (Data Envelopment Analysis), we use these weighted environmental effects indices to form one environ-mental performance score for each family type and product type. We find that the environmental performance of each family type changes considerably across environmental effect types. The analysis of the overall environmental performance scores shows that families living in urban flats, especially the young and elderly families, have the most environmentally friendly consum-ption pattern. Middle income families living in houses have the least environmentally fr...

Evaluating sustainability of household consumption—Using DEA to assess environmental performance

In this study we discuss and apply ways to assess sustainability of household consumption. We propose an integrated environmental-economic model system providing a basis for identifying products or family types representing high environmental pressure. By using this model system, it is possible to develop a general environmental performance index, including weighting the pressure of numerous environmental impacts. We find that middle income families living in single family homes have the least environmentally friendly consumer basket and also constitute a large share of all families in Denmark. Thus, environmental policy measures should be directed towards middle income families living in houses.

Ole Gravgård Pedersen

Papers

The System of Environmental and Economic Accounts—2003 and the Economic Relevance of Physical Flow Accounting

An environmental performance index for products reflecting damage costs

Evaluating sustainability of household consumption—Using DEA to assess environmental performance

Environmental performance of households

SEEA-2003 and the Economic Relevance of Physical Flow Accounting at Industry and National Economy Level