Bookmark and ShareDr Victoria Johnson is a researcher on the climate and energy team at nef.

Today, the newly formed Department of Enertgy and Climate Change published final greenhouse gas emission figures for 2007. According to DECC, emissions had fallen by 1.7 per cent below 2006 figures. Great. Right?

Well it would be if the very foundations of our emissions monitoring weren’t based on voodoo accounting that ‘carbon launder’ the emissions from economies like the UK and the USA.

Under the United Nations Framework Convention on Climate Change (UNFCCC) emissions monitoring guidelines, wealthier nations systematically underestimate their carbon emissions, while poorer countries systematically overestimate their emissions. This is because the UNFCCC requires emissions to be reported from a production-based perspective. In other words, only emissions associated with domestic emissions and exports are counted, while those associated with imports are washed from the national accounts. Because this method does not take into account ’embodied carbon’ of imports; the consumer of the product takes no responsibility for the greenhouse gas emissions associated with its production.

The UK’s consumption levels have risen steadily. And, as our major retailers scour the world for the cheapest production costs, the emissions that we are actually responsible for, have not only risen in line with our additional consumption – our consumption is proportionally more carbon intensive. This is because how much carbon that is in the energy mix (carbon intensity of energy) tends to be lower in developed nations and higher in developing nations. For example, the carbon intensity of energy in India is 20 per cent higher than the UK. This means a policy decision to monitor emissions based on production is more likely to result in an increase in emissions rather than a decrease – as production is driven up in nations with an energy mix that is more dependent on fossil fuels.

Today, if everyone consumed as much as the average UK citizen, we would need more than three planets like Earth to support us. In order to live within our overall environmental means, and to enable all of the world’s population to meet their basic needs, the UK will have to dramatically reduce the burden our high-consuming lifestyles place on the ecosystem. In effect – we have to take steps to reduce our ‘ecological debt’ – the burden our high-consuming lifestyles have placed, and continue to place on the rest of the planet.

An investigation published in the journal Ecological Economics found that if UK greenhouse gas emissions were monitored by our consumption rather than our production, the UK’s progress towards its Kyoto emission targets of 12.5 per cent below 1990 levels disappears completely. Instead, over the period 1990-2004, the UK’s emissions have climbed by 8 per cent above 1990 levels.  A more recent analysis painted an even more dismal picture, showing a 19 per cent increase in the UK’s emissions over the period 1990-2003.

The much vaunted ‘decoupling of carbon and the economy’ is specious. If anything, the relationship is ever more tightly bound than ever. Industrialised nations are not dematerialising – they are outsourcing.

To calculate a more realistic inventory of greenhouse gas emissions, progress should be made to develop a monitoring methodology to measure emissions according to consumption. This would account for all the emissions attributable what we actually consume, and it is therefore more just.

There are five key advantages of a climate framework that assigns responsibility of emissions based on consumption. These include:

  • more greenhouse gases would be covered with existing levels of participation in international agreements;
  • the framework could still provide incentives for large-scale mitigation options in developing nations, without directly capping their emissions;
  • increased mitigation options and incentives to invest in cleaner production technology;
  • concerns relating to competitiveness would be reduced as emissions would be allocated according to the consuming nations; and
  • consumption-based emissions accounting would strengthen the carbon market.

Since exports do contribute to a nation’s GDP, it has been argued that the exporting nation should be responsible for some of the emissions associated with the production of goods. Exports are driven by demand, however, and often only a proportion of export value is accrued in country. For example, one study showed that for every $1000 of Chinese exports to the USA in 2002, only $386 was accrued in China. As such, it is reasonable to argue that this is a fair approach, likely to encourage the participation of countries such as India and China in a post-Kyoto agreement.

In a recent report, the UK’s National Audit Office recognised the deficiency of the ‘production-based’ methods, and considered the potential of a ‘consumption-based’ emissions inventory for the UK’s domestic climate policy.[i] The report it found that calculation of emissions on a ‘consumption’ basis would involve too many uncertainties and cannot currently provide a robust, internationally agreed basis for reporting.

While data uncertainties are currently an obstacle, they can be overcome with investment in research and development of alternative methods of monitoring emissions.  As a start, however, per capita carbon footprint calculations produced by the Global Footprint Network that measure emissions based on per capita consumption, in addition to emissions from energy use could be used as a crude alternative.

[i] NAO (2007) UK greenhouse gas emissions: measurement and reporting (London: National Audit Office).