On the fair accounting of carbon emissions in the global system using an exergy cost formation concept

Abstract

Carbon accounting is necessary for designing effective climate change mitigation policies. A proper and fair accounting method should motivate both the producers toward cleaner production methods and the consumers toward reducing the embodied emissions of their consumption. This research work proposes a new approach to map the production chain of carbon emissions in which every subsystem is responsible for the level and efficiency of its production activities and embodied emissions for providing its economic activities or final demands. The exergy cost formation concept is used to track the emissions in the production chain. The results of this accounting present the total carbon loads on economic outputs either consumed locally or exported abroad (CExA). The CExA results are then compared to the results of conventional production-based (PBA) and consumption-based (CBA) carbon inventories. Here we show that, in addition to the levels of production and consumption, the economic structures of the countries and the efficiency of the production activities are important factors differentiating the roles of the countries in the global emissions. Our results show that the share of the imported emissions to the total CExA varies between 14% for developing countries to 34% for the developed countries. Moreover, although the ratio of CBA to PBA for the countries is highly dependent on their economic states (0.87 for developing countries and 1.21 for developed countries), the ratio of CExA to PBA does not follow a unique trend among developing or developed countries. The results demonstrate that, according to the proposed sharing approach, the import-oriented developed countries, which have benefited the most from the carbon leakage effect, are mostly penalized for the embodied emissions associated with the imports to their economy, and vice versa.