Greenhouse gas emissions due to national product consumption: from demand and research gaps to addressing key challenges

Why carbon leakage matters and what can be done against it

Forests play an important role in climate change mitigation and concentration of CO2 reduction in the atmosphere. Forest management, especially afforestation and forest protection, could increase carbon stock of forests significantly. Carbon sequestration rate of afforestation ranges from 0.04 to 7.52 t C·hm-2·a-1, while that of forest protection is 0.33-5.20 t C·hm-2·a-1. At the same time, greenhouse gas (GHG) is generated within management boundary due to the production and transportation of the materials consumed in relevant activities of afforestation and forest management. In addition, carbon leakage is also generated outside boundary from activity shifting, market effects and change of environments induced by forest management. In this review, we summarized the definition of emission sources of GHG, monitoring methods, quantity and rate of greenhouse gas emissions within boundary of afforestation and forest management. In addition, types, monitoring methods and quantity of carbon leakage outside boundary of forest management were also analyzed. Based on the reviewed results of carbon sequestration, we introduced greenhouse gas emissions within boundary and carbon leakage, net carbon sequestration as well as the countervailing effects of greenhouse gas emissions and carbon leakage to carbon sequestration. Greenhouse gas emissions within management boundary counteract 0.01%-19.3% of carbon sequestration, and such counteraction could increase to as high as 95% considering carbon leakage. Afforestation and forest management have substantial net carbon sequestration benefits, when only taking direct greenhouse gas emissions within boundary and measurable carbon leakage from activity shifting into consideration. Compared with soil carbon sequestration measures in croplands, afforestation and forest management is more advantageous in net carbon sequestration and has better prospects for application in terms of net mitigation potential. Along with the implementation of the new stage of key ecological stewardship projects in China as well as the concern on carbon benefits brought by projects, it is necessary to make efforts to increase net carbon sequestration via reducing greenhouse gas emissions and carbon leakage. Rational planning before start-up of the projects should be promoted to avoid carbon emissions due to unnecessary consumption of materials and energy. Additionally, strengthening the control and monitoring on greenhouse gas emissions and carbon leakage during the implementation of projects are also advocated.

The impact of income inequality on consumption-based greenhouse gas emissions at the global level: A partially linear approach

SummaryThe positive and negative environmental impacts of information and communication technology (ICT) are widely debated. This study assesses the electricity use and greenhouse gas (GHG) emissions related to the ICT and entertainment & media (E&M) sectors at sector level, including end users, and thus complements information on the product level. GHGs are studied in a life cycle perspective, but for electricity use, only the operational use is considered. The study also considers which product groups or processes are major contributors. Using available data and extrapolating existing figures to the global scale for 2007 reveals that the ICT sector produced 1.3% of global GHG emissions in 2007 and the E&M sector 1.7%. The corresponding figures for global electricity use were 3.9% and 3.2%, respectively. The results indicate that for the ICT sector, operation leads to more GHG emissions than manufacture, although impacts from the manufacture of some products are significant. For the E&M sector, operation of TVs and production of printed media are the main reasons for overall GHG emissions. TVs as well as printed media, with the estimations made here, led to more GHG emissions on a global level in 2007 than PCs (manufacture and operation). A sector study of this type provides information on a macro scale, a perspective easily lost when considering, for example, the product‐related results of life cycle assessments. The macro scale is essential to capture changes in total consumption and use. However, the potential of the ICT sector to help decrease environmental impacts from other sectors was not included in the assessment.

Better information on greenhouse gas (GHG) emissions and mitigation potential in the agricultural sector is necessary to manage these emissions and identify responses that are consistent with the food security and economic development priorities of countries. Critical activity data (what crops or livestock are managed in what way) are poor or lacking for many agricultural systems, especially in developing countries. In addition, the currently available methods for quantifying emissions and mitigation are often too expensive or complex or not sufficiently user friendly for widespread use.The purpose of this focus issue is to capture the state of the art in quantifying greenhouse gases from agricultural systems, with the goal of better understanding our current capabilities and near-term potential for improvement, with particular attention to quantification issues relevant to smallholders in developing countries. This work is timely in light of international discussions and negotiations around how agriculture should be included in efforts to reduce and adapt to climate change impacts, and considering that significant climate financing to developing countries in post-2012 agreements may be linked to their increased ability to identify and report GHG emissions (Murphy et al 2010, CCAFS 2011, FAO 2011).

Manufactures have been pressed to reduce greenhouse gas (GHG) emissions by environmental regulations and policies. Towards to reduction of GHG emissions, a carbon tax has been already introduced in 40 countries. Owing to different carbon prices among countries, there are potential risks of carbon leakage, where manufacturers transfer production operations to the countries with lower taxes to pursue lower costs. Moreover, procurement costs and GHG emissions vary by country because of economic conditions and electric energy mixes. Therefore, total GHG emissions could be globally reduced if manufactures relocate their production bases or switch suppliers in the country with lower GHG emission levels. This study proposes a green procurement decision for the supplier selection and the order quantity for minimizing GHG emission and costs considering the different carbon taxes in different countries. First, a bill of materials for each part is constructed through the life cycle inventory database with the Asian international input/output tables for a case study. Second, a green procurement decision considering the different carbon prices is formulated using integer programming. Finally, the results, including carbon leakage, are analyzed from the viewpoint of manufacturers, governments, and global perspectives.

Consumption- and production-based accounting approaches for national greenhouse gas (GHG) emissions provide different insights to support climate policymaking. However, no study has yet comprehensively assessed the consumption-based GHG emissions of the entire New Zealand’s economy. This research, for the first time, quantified New Zealand’s GHG emissions using both consumption- and production-based accounting approaches and considered the policy implications for adopting a consumption-based approach over a production-based approach. A global multi-regional input-output (MRIO) analysis was undertaken to calculate the consumption- and production-based GHG emissions of New Zealand for the year 2012. The MRIO analysis was based on the Eora database, which accounts for 14,839 industry sectors from 189 countries. Given the sectoral classification of each country is quite different and in order to ease interpretation of the results, the industry sectors of each country were classified and aggregated into 16 key sectors, and GHG emissions were calculated for those key sectors. The MRIO analysis showed that New Zealand’s consumption- and production-based GHG emissions in 2012 were 61,850 and 81,667 ktCO2eq, respectively, indicating that the country was a net exporter of GHG emissions in 2012. The dominant contributors to the consumption-based GHG emissions were the other services and construction key sectors (each representing 16% of consumption-based emissions), followed by food and beverages (14%), transport and equipment (12%) and financial and trade services (11%), whereas the dominant contributor to the production-based GHG emissions was the agriculture key sector (representing 52% of production-based GHG emissions). The results of the study provided two key insights to support climate mitigation activities and policymaking. First, the consumption- and production-based accounting approaches results have different rankings for the most dominant sectors contributing to New Zealand’s GHG emissions. Second, only the consumption-based accounting approach enables the quantification of the embodied emissions in New Zealand’s trade activities, and it indicated that a large proportion of GHG emissions are embodied in New Zealand’s trade activities. These insights, therefore, have important implications for future policies that could positively influence the consumption patterns of New Zealand citizens and the production structure and efficiency of New Zealand’s trade partners. This research quantified New Zealand’s GHG emissions using both consumption- and production-based accounting approaches. Given the two accounting approaches provided different insights, both approaches should be used in a complementary way when developing climate policies. However, implementation of a consumption-based accounting approach to support development and implementation of climate policies and instruments requires further consideration.

An evaluation of the effect of greenhouse gas accounting methods on a marginal abatement cost curve for Irish agricultural greenhouse gas emissions

ABSTRACTThis paper studies how carbon pricing affects greenhouse gas (GHG) emissions from international transport, production, and consumption of traded goods by modeling the international transport sector explicitly. Strategic behavior of a transport firm generates a novel mechanism of carbon leakage across borders and sectors. The effectiveness of carbon pricing depends on whether the backhaul problem (i.e., the imbalance of shipping volume in outgoing and incoming routes) is present. If the backhaul problem is absent, carbon pricing is effective in reducing global GHG emissions. With the backhaul problem, carbon pricing on goods production results in cross‐border carbon leakage. However, strategic freight‐rate setting by the transport firm mitigates this leakage. The opportunity for foreign direct investment (FDI) also affects carbon‐pricing effectiveness because the transport firm tries to deter FDI. Surprisingly, carbon pricing in the transport sector may not affect GHG emissions at all. Moreover, domestic carbon pricing on goods production may decrease GHG emissions from both transport and foreign production even if there is no domestic production under FDI.

Climate policy: Bucket or drainer?

One of the problems in an environmental policy is carbon leakage, which is increasing GreenHouse Gas (GHG) emissions as an adverse effect due to the production shift from countries with strict climate change policies to those with careless ones. In this situation, Carbon Boarder Adjustment (CBA) is considered as a countermeasure for mitigating GHG emission and carbon leakage globally, with European Union (EU) agreeing to introduce the CBA in 2026. CBA is expected to have huge impact upon a global supply chain network. The reasons of it are that total cost and GHG emissions on a global supply chain network have been influenced by the different procurement cost, customs duty and GHG level from each country by the price level, the governmental policy, and the energy mix. However, it is not revealed how much effect CBA has for the cost, and GHG emission on a global supply chain network. Thus, this study models a global supply chain network with CBA as the intersection of environment and economy. First, a global supply chain network with CBA is modeled and formulated for minimizing the total cost using integer programming. Second, a problem example is prepared with bill of materials for the procurement cost and the GHG emission using life cycle assessment. After that, under the market in the U.S., a numerical experiment is conducted to validate the proposed model. Finally, the effect of CBA is discussed.

Based on the estimation of carbon cost from afforestation in project boundary and carbon leakage out of boundary in the construction period of "Grain for Green" Program (GGP) (2000-2010), the annual variance and composition of the carbon cost and carbon leakage, as well as characters of variance of net carbon sequestration were analyzed for GGP and respective program regions. Results showed that the carbon costs in northwest region, southwest region, northeast region, north region and central south and east region were 3.38, 3.64, 1.03, 1.66 and 4.38 Tg C, respectively, totaling 14.09 Tg C. Meanwhile the carbon leakages of the above regions were 21.33, 4.60, 5.50, 1.32 and 3.78 Tg C, respectively, and 36.53 Tg C in total. The composition characters of the carbon costs of the GGP and the respective regions were similar. Carbon emissions from afforestation were the largest carbon cost, and afforestation on converted farmland was the main carbon emission source. Accordingly, among the materials consumed, fertilizer brought about the largest carbon cost, followed by building materials, while carbon emissions from fuels, irrigation, herbicides and pesticides only accounted for about 10% for respective regions. The carbon cost and carbon leakage of the GGP were 50.62 Tg C in total, which counteracted 19.9% of the sequestered carbon in the program. In northwest region, southwest region, northeast region, north region and central south and east region, carbon emissions (including cost and leakage) accounted for 38.9%, 10.4%, 26.1%, 8.9% and 15.5% of the carbon sequestration, respectively. The net carbon sequestration of the GGP was 203.50 Tg C with an annual average of 18.50 Tg C·a-1. The carbon cost and leakage offset a minor part of the carbon sequestration of the GGP. Therefore, the GGP contributed significantly to greenhouse gas mitigation in China as well as global climate warming mitigation. Adopting precision fertilization in economic forest afforestation and supplying alternative livelihoods to farmers in the program could be the potential measures to reduce carbon cost and carbon leakage.

Quantifying greenhouse gas (GHG) emissions and setting GHG emissions budgets for anthropogenic systems are influenced by several value and modeling choices. This study, for the first time, quantified the influence of choice of GHG accounting approach, GHG metric, time horizon, climate threshold, global emissions budget calculation method, and effort-sharing approach, taking New Zealand (NZ) as a case study. First, NZ's production- and consumption-based emissions were quantified using multiregional input-output analysis and applying different GHG metrics (global warming and temperature potentials) and time horizons (20 and 100 years). Second, global emissions budgets for 1.5 °C, 2 °C, and 1 W m-2 climate thresholds were estimated. Budget shares were then assigned to NZ using two effort-sharing approaches (grandfathering and economic value), and emissions were benchmarked against the assigned shares. Finally, the analysis was undertaken at the NZ sector level. The results showed that, for each GHG accounting approach, NZ's total emissions exceeded their budget shares, irrespective of the choices; the largest source of uncertainty was the choice of global emissions budget calculation method, followed by GHG metric, climate threshold, effort-sharing approach, and reference year for the grandfathering approach. The sector-level analysis showed that, while most sectors exceeded their budget shares, some performed within them. The ranking of uncertainty sources was quite different at the sector level, with the choice of effort-sharing approach providing the largest source of uncertainty. Overall, the study indicates the importance of handling value and modeling choices in a transparent way when quantifying GHG emissions and setting emissions budgets for anthropogenic systems.

Background: Since global warming is a crucial worldwide issue, carbon tax has been introduced in the global supply chain as an environmental regulation for the reduction of greenhouse gas (GHG) emissions. Costs, GHG emissions, and carbon tax prices differ in each country due to economic conditions, energy mixes, and government policies. Additionally, multiple countries have signed a Free Trade Agreement (FTA). While FTAs result in their economic benefit, they also increase the risk of carbon leakage, which increases GHG emissions in the global supply chain due to relocation production sites from a country with stricter emission constraints to others with laxer ones. Method: This study proposes a mathematical model for decision support to minimize total costs involving carbon taxes with FTAs. Results: Our model determines suppliers, factory locations, and the number of transported parts and products with costs, FTAs, carbon taxes, and material-based GHG emissions estimated using the Life Cycle Inventory (LCI) database. The FTA utilization on the global low-carbon supply chain is examined by comparing the constructed supply chains with and without FTAs, and by conducting sensitivity analysis of carbon tax prices. Conclusions: We found that FTAs would not cause carbon leakage directly and would be effective for reducing GHG emissions economically.

Global actions under the Paris agreement: Tracing the carbon leakage flow and pursuing countermeasures