International trade may offset reported carbon emission reductions

If you buy a sweater or a refrigerator, emissions from the production processes are allocated to the producing country. In the consuming country these emissions remain invisible. In this way, some countries can increase their consumption (carbon footprint) while their officially reported emissions remain stable.

An international team of researchers has now compiled a trade-linked global database of carbon dioxide emissions running from 1990 to 2008 and for 57 economic sectors in 113 countries. This dataset allows, for the first time, a detailed analysis of the role of international trade in the development of emissions in individual countries over time.

The production of traded goods and services, the authors report, accounted for 20 percent of global emissions in 1990 and this increased to 26 percent in 2008.

"A key explanation for this finding is that increased imports to rich countries have led to increased production and emissions in developing countries," said Glen Peters at the Center for International Climate and Environmental Research -- Oslo (CICERO), lead author of the study.

"The consumption-driven emissions in many developed countries, sometimes called the carbon footprint, rose faster than the officially reported territorial emissions."

"International trade has enabled much needed economic development in emerging economies, but at the same time, many rich countries have benefited as they increased consumption without increasing their reported territorial emissions," said Glen Peters. According to the authors, only by shifting emissions to the developing world industrialised countries are currently able to meet their climate protection targets with comparatively little efforts despite their growing consumption levels.

"Through their consumption most industrialised countries contributed more to emission increases in developing countries than they cut emissions at home," said Jan Minx, one of the authors based at the Departments Economics of Climate Change and Sustainable Engineering at Technical University Berlin. In 2008, emission increases in developing countries from industrialised countries' consumption exceeded the emission savings made in industrialised nations by five times.

Many developed countries have reported stable emission levels, thanks in part to the accounting rules established under the united Nations Framework Convention on Climate Change that require countries to report only territorial emissions.

"In today's accounting system developed nations do not need to report emissions caused by their consumption even if this contributes to global emissions growth. Our findings suggests there is a need to additionally report and monitor emissions transfers that occur through international trade," said Glen Peters. The study questions the sufficiency of the territorial accounting principle in an international climate regime in which only some regions have emission restrictions.

"This does not mean that we should abandon regional rules for climate mitigation. Instead, the extension of these rules is necessary," explains Ottmar Edenhofer from the Potsdam Institute for Climate Impact Research, who also leads the Department Economics of Climate Change at Technical University Berlin, which is co-financed by the Michael-Otto-Foundation. At present the international climate regime is fragmented. "We need pathways to a global deal now," Edenhofer emphasises.

"Today, developed countries have to report their CO₂ emissions, but we consume a lot of stuff that is produced in China and other developing countries. Their CO₂ emissions are helping support my consumption. This study shows that consumption is increasingly depending on CO₂ emissions in other countries. If we want to be able to control emissions, we need to keep tabs on emissions transfers that occur through international trade," comments Ken Caldeira from the Carnegie Institution for Science in the United States. Caldeira authored a study on the issue in 2010.

The study "Growth in emission transfers via international trade from 1990 to 2008" has been conducted by researchers at the Center for International Climate and Environmental Research -- Oslo (CICERO), Technical University Berlin, Science and Technology Policy Institute, Carnegie Mellon University, and Potsdam Institute for Climate Impact Research.