Study Claims ‘Outsourcing’ of Rich Country CO2 Emissions

17 March 2010

Over one third of carbon dioxide (CO2) emissions associated with the consumption of goods and services in many European countries are produced offshore, according to a new study by two researchers from the Carnegie Institution for Science.

The authors argue that ‘international carbon leakage' would be better measured by adding up the amount of CO2 released during the worldwide production of goods and services that each country consumes rather than by totalling the CO2 emissions released during the production that occurs inside each country's borders,. Traditional production-based national emissions accounting hides a substantial amount of CO2 that is ‘traded' internationally, they say.

Worldwide, 23 percent of all CO2 emissions are produced in one country and consumed in another, the study found.

"Just like the electricity that you use in your home probably causes CO2 emissions at a coal-burning power plant somewhere else, we found that the products imported by the developed countries of Western Europe, Japan, and the United States cause substantial emissions in other countries, especially China," said Stephen Davis, lead author of the study. "On the flip side, nearly a quarter of the emissions produced in China are ultimately exported."

Davis and his co-author Ken Caldeira used industry-specific trade data from 2004 on trade flows between 113 countries and regions to create their ‘consumption-based accounting' of CO2 emissions. Their methods are detailed in a press release from the Carnegie Institution.

The researchers found that China is easily the world's largest net ‘exporter' of emissions with 1,430,000 kilotonnes of CO2 embodied in its exports. Russia is next largest with 389,000 kilotonnes, followed by the Middle East, South Africa, Ukraine and India.

The primary net ‘importer' of CO2 emissions is the US, by far. It imports 1,220,000 kilotonnes, while the next largest importer is Japan, with 468,000 kilotonnes. The United Kingdom, Germany, France and Italy round out the top six.

Davis and Caldeira also look at CO2 imports and exports in per capita terms. They conclude that "net imports of emissions to the United States, Japan and countries in Western Europe are disproportionately large, with each individual consumer associated with 2.4-10.3 tonnes of CO2 emitted elsewhere."

Luxembourg, Hong Kong, Singapore, Iceland and Liechtenstein top the list of highest per capita consumers of net CO2 imports. According to the study, "individual consumers in the most affluent and least populous countries of Western Europe...are importing the same mass of emissions as are exported by 5-10 people in China."

Hong Kong, Singapore, and eight Western European countries comprise the top ten net importers of emissions on a per capita basis, but the US surpasses every other country in total consumption emissions at 22.0 tonnes. The US is the world's largest producer as well as consumer of CO2 emissions.

The net effect is an export of emissions from China and other emerging economies to the developed nations of the US, Japan and in Western Europe. Davis and Caldeira write that "the prosperity of developed countries was not only founded on two centuries of fossil fuel emissions, but also in some cases is now being maintained by emissions produced in developing countries...Consumption-based accounting of emissions provides grounding for ethical arguments that the most developed countries - as the primary beneficiaries of emissions and with greater ability to pay - should lead the global mitigation effort."

A graphic depicting the ‘trade flow' of carbon emissions between the ten largest net importers and exporters can be viewed here.

ICTSD reporting.

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