Policies and Consumption-Based Carbon Emissions from a Top-Down and a Bottom-Up Perspective

Kirsten S Wiebe,Simon Gandy,Christian Lutz

doi:10.4236/lce.2016.71003

Abstract

Two major approaches for calculating consumption-based carbon emissions can be distinguished: top-down approaches, in the form of multi-regional input-output (MRIO) models, and bottom-up approaches, in the form of life cycle assessment (LCA). Both approaches have pros and cons and are very data-intensive. Several MRIO databases have been developed and published over the past years. These databases, which have been refined and validated, will be used for policy analysis. As LCA is usually only applied to very specific products and product groups, analysis is limited and many products have not yet been looked at. This paper makes use of both a top-down and bottom-up approach to calculate the impacts of different policy measures on the development of consumption-based carbon emissions in the EU28 and on emissions elsewhere in the world. The policy examples used are the EU’s CO2 in Cars Regulations and the South African renewable energy initiative. The results from the top-down approach are then compared with those from the bottom-up approach. Both bottom-up and top-down approaches use the same underlying assumptions regarding the impacts, but due to the very different nature of the methodologies, differences in the results are observed, though sign and scope of the results are the same for the two cases. Part of the deviations can be explained by differences in methodology and scenario design due to these differences. It can be concluded that bottom-up and top-down approaches can and need to be applied to different policies and are generally complementary.

Highlights

The approaches for calculating consumption-based carbon emissions can be divided into two broad categories: top-down approaches, in the form of multi-regional input-output (MRIO) models, and bottom-up approaches, in the form of process analysis commonly known as life cycle assessment (LCA)
The system boundary of MRIO analysis is much wider than the system boundary of LCA, but MRIO models use average industry/product group data, so that the true impact of a certain product belonging to that industry/product group may be hidden
Rather than applying a hybrid analysis, our research suggests that for certain cases the bottom-up LCA methodology is more applicable, while for other applications the results generated by an MRIO analysis are more useful

Summary

Introduction

The approaches for calculating consumption-based carbon emissions can be divided into two broad categories: top-down approaches, in the form of multi-regional input-output (MRIO) models, and bottom-up approaches, in the form of process analysis commonly known as life cycle assessment (LCA). While LCA usually looks at individual products or services and requires either substantial data collection or the use of available LCA databases, input-output models mostly consider readily available data (provided by national statistical offices or international institutions) on the aggregated industry or product group level. These different levels of detail have an immediate impact on system boundaries: the boundary of an LCA is usually the individual product and a few stages in its production chain [2]. Various forms of hybrid approaches have been developed recently [3]-[6]

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