Implications of the consumption-based accounting for future national emissions budgets

Abstract

ABSTRACT As a complement of production-based accounting (PBA), consumption-based accounting (CBA) provides an alternative perspective to understand national emissions and responsibilities for global climate change. Existing studies assessed historical national emissions under CBA. However, how CBA might guide future mitigation under the Paris Agreement goals has not been well understood. By combining global multi-region input-output analysis and the equity principle of ‘equal cumulative per capita emissions’ (ECPCE), this study explores potential implications of CBA for future national emissions budgets to limit global warming to below 1.5°C. Historically, consumption-based greenhouse gas (GHG) emissions were higher than production-based emissions in most developed countries while lower in many developing countries. When CBA is used instead of PBA to allocate emissions budgets by ECPCE, future GHG mitigation burdens would become more stringent in 70% of Annex I (mostly developed) countries but slightly smaller in 55% of non-Annex I (mostly developing) countries. In particular, more than half of Annex I countries might need to achieve negative GHG budgets under 1.5°C. Our analysis emphasizes that, as net emission importers, developed countries could strive to pay equal attention to achieving consumption-based and production-based emissions reductions, and strengthen technological and financial support to developing countries that undertake production outsourcing. As net emission exporters, with international support and domestic investment, developing countries could pragmatically promote energy structure optimization and technological innovation to accelerate the decarbonization of production. To support the Paris Agreement goals, mitigation contributions initiated from the perspective of CBA could also be welcomed. Key policy insights Developed countries shift emissions to developing countries through international trade. CBA increases historical responsibilities of developed countries for climate warming from the PBA assessments. Compared to PBA, CBA has clear implications on future national emissions budgets under responsibility-based allocations, but does not change the urgency of national mitigation required to achieve the Paris Agreement goals. Allocated by ECPCE, future GHG budgets for over 50% of the world’s countries would be run out before 2040 under 1.5°C at the 2015 emissions rates, using either CBA or PBA. According to different roles in global supply chains, developed countries should step up support to help developing countries improve emissions and energy intensities, which is a key to reducing emissions embodied in trade.