I have been traveling for the last week or so, and this has kept me from writing this blog. Now that I have fully recovered from the jet lag, I am going to write a post on outsourcing emissions. I have no plans for extensive traveling in the near future, so I will be posting regularly.
Since industrialized countries consume a lot goods that are imported from developing countries, especially China, the total emissions from our consumption are higher than the total emissions from production. A recent study quantifies this effect using trade data from 2004 in 113 countries and 57 industry sectors. The authors find that US carbon dioxide emissions would increase by 2.5 tons if consumption, as opposed to production, was measured; in Europe, the figure exceeds four tons.
What would follow if we were to measure emissions from consumption? First, industrialized countries would look even worse than they do today, and especially Europe’s performance would deteriorate. China’s situation would improve, as the country would be able to shift the blame for the surge in power generation from coal at least partially on the unlimited appetite for inexpensive consumer goods in the West.
Second, to measure consumption emissions would be a major administrative challenge. Production emissions are relatively easy to measure, as it suffices to account for the total consumption of fossil fuels (and add other greenhouse gases to that). However, consumption emissions cannot be measured without information on the carbon content of trade. Although the authors of the study cited above were only interested in estimating mean emissions from different sectors, they were unable to obtain data more recent than that from 2004.
Finally, if consumption emissions emerge as a serious alternative measure, intense bargaining can be expected. The European Union has a very strong incentive to oppose such a measurement approach, while China would enthusiastically support it.
In addition to these practical considerations, the normative question remains: who is responsible for emissions, the producer or the consumer? It seems to me that some kind of a shared responsibility would be the right way to go, but I am a bit worried that implementing such a scheme could be difficult in practice.