Consumption-based Accounting Research Articles

Potential impact of abiotic resource use considering country-specific supply chain: consumption-based characterization and normalization utilizing a multi-regional input–output model

Abstract Purpose Life cycle impact assessment (LCIA) quantifies the potential impacts of environmental loads in the characterization step and evaluates their significance in the normalization step. This study develops consumption-based characterization factors (CFs) and normalization values (NVs) for abiotic resource use using a multi-regional input–output model. Consumption-based accounting in these steps is critical for ensuring consistency between the scope of these steps in LCIA and the overall evaluation scope of the life cycle assessment (LCA) study. Methods We calculated the consumption-based CFs and NVs for the target year 2015, covering 189 countries and regions for 29 mineral resources and three fossil fuels. These calculations were based on estimates of induced mine production and the adoption of country-level mine production-based CFs. The mining sector in the Eora multi-regional input–output database was disaggregated using country-level mine production data and trade statistics, enabling the estimation of induced mine production for each consuming country. A user cost model was adopted to calculate country-level mine production-based CFs. Results and discussion Consumption-based CFs varied significantly, with the maximum values being up to 3,300 times higher than the minimum, depending on the consuming countries. This highlights the importance of considering supply chain differences when assessing the potential impacts of abiotic resource use. The USA had the largest consumption-based NVs, followed by China and Brazil, with fossil fuels as the primary contributing resources. Some countries (e.g., Japan and Germany) exhibited notably higher consumption-based NVs compared to mine production-based NVs, reflecting their scarcity of primary resources in-country and underscoring the relevance of consumption-based NVs. Compared to previous studies with lower resolution for target resources, the consumption-based NVs developed in this study, which differentiate a greater variety of resources, offer more plausible results and enable more flexible analyses targeting specific resources. Conclusions Consumption-based accounting of the potential impacts associated with resource use can support LCA practitioners in conducting region-specific analyses without the need to identify mining countries for abiotic resources. The findings can also be utilized to analyze the responsibilities of consuming countries, sustainable supply chain management, and country-level supply risk assessments. Future work should focus on improving the disaggregation of metal-related sectors using smelter, refinery, and manufacturing data.

Assessing production-based and consumption-based greenhouse gas emissions in the Kingdom of Saudi Arabia: insights for mitigation and policy

Greenhouse gas (GHG) emissions, and in particular CO2, are critical drivers of climate change, necessitating coordinated global efforts to mitigate their impact. This has led the Kingdom of Saudi Arabia (KSA) to launch several ambitious initiatives to curb its own emissions. However, there remain significant challenges when it comes to measuring outcomes, due to uncertainties in the existing methods and data. This current study therefore employs Production-Based (PB) and Consumption-Based (CB) emission accounting methods for KSA, emphasizing strategies to minimize the uncertainty inherent in these models. The results reveal that KSA is a net carbon exporter, with PB emissions (523 million tonnes CO2 equivalent (CO2e)) exceeding CB emissions (471 million tonnes CO2e). In addition, the validity of the applied methodology is supported by the literature. This research finds that private households form the largest contributors, along with sectors including electricity, land transport, water, and construction, as well as chemical, rubber, and plastic. The findings also confirm the potential for targeted policies to reduce emissions, i.e., the promotion of energy-efficient appliances, enhanced home insulation, public transportation, and recycling. Furthermore, this study highlights the importance of national investment in the accurate measurement of emissions and detailed energy statistics.

Erratum to: A justice and innovative way ahead of consumption-based emission accounting approach

Erratum to: A justice and innovative way ahead of consumption-based emission accounting approach

Allocation of carbon emission responsibility among Chinese cities guided by economic welfare gains: Case study based on multi-regional input-output analysis

Allocation of carbon emission responsibility among Chinese cities guided by economic welfare gains: Case study based on multi-regional input-output analysis

Tracing Nitrogen Flows Associated with Beef Supply Chains: A Consumption-Based Assessment.

While highly connected food chains provide numerous benefits, they lack traceability and transparency. As such, understanding the spatial heterogeneity in their environmental burdens is critical for targeted interventions. This is especially important for nutrient-related impacts such as nitrogen since the release of reactive nitrogen has been linked to loss of biodiversity and decrease in water quality in different parts of the world. Animal feed production is heavily dependent on synthetic fertilizers, and the consumption of beef products, in particular, is associated with high nitrogen footprints. Although there is a rich body of work on nutrient footprints of beef production, there is a gap in understanding the spatial distribution of the nutrient releases throughout the beef supply chain in the U.S. We present an optimization-based framework to trace supply chain networks of beef products at the county level. Using publicly available data, we construct a weighted network of nutrient flows based on mass balance, including synthetic fertilizers, manure production, and crop uptake and residues. The results show that beef consumption in a county can be associated with nitrogen losses in hundreds of counties. One year worth of beef consumption in the United States released approximately 1.33 teragrams (Tg) of N to the environment, and most of it as diffuse pollution during the feed production phase. Analysis also revealed the huge disparity between consumption-based and production-based impacts of beef and the need for considering consumption-based accounting in discourse around the environmental sustainability of food systems.

A justice and innovative way ahead of consumption-based emission accounting approach

A justice and innovative way ahead of consumption-based emission accounting approach

Sustainable development goal 12 and its synergies with other SDGs: identification of key research contributions and policy insights

The relationships of SDG 12 (responsible consumption and production) with other sustainable development goals (SDGs), both direct and indirect, necessitate a systematic analysis to understand its pivotal role in achieving other SDGs. This work focuses on a threefold investigation through a scientometric framework. Initially, the study sought to map and analyze the naturally formed linkages between SDG 12 and other SDGs by examining the literature specifically devoted to SDG 12, thereby revealing the SDGs that are strongly linked to SDG 12. The subsequent phase of the investigation identified prominent topics related to SDG 12 that require detailed exploration. Finally, the selected topics are mined through a methodical approach termed flow vergence gradient analysis, allowing for the revelation of significant contributions within each topic. Through the analysis of the SDG linkage map, SDG 13 (climate action), SDG 7 (affordable and clean energy), SDG 11 (sustainable cities and communities), and SDG 15 (life on land), among others, were recognized as closely linked to SDG 12. Following this identification, five major topics—Industrial Symbiosis, Electronic waste, Carbon emissions, Life Cycle Assessment, and Green products—were deemed suitable for comprehensive mining to extract pivotal contributions. As policy recommendations, adopting a multifaceted approach to e-waste management and sustainable practices is imperative. Implementing consumption-based accounting (CBA) to achieve SDG 12 holistically will be useful. Businesses must align with circular economy principles, minimize hazardous materials, and adhere to low-emission, green supply chain practices. The emphasis is also on the need for proactive R&D collaboration with academia to meet SDG 12 targets, alongside engaging in community awareness through corporate social responsibility initiatives.

Decoupling with(out) outsourcing? Quantifying emissions embodied in BRI trade with implications for climate policy

We empirically examine the trade-related environmental impacts of the Belt and Road Initiative (BRI) using a novel technology-adjusted consumption-based accounting in addition to traditional accounting schemes and data from the Eora Global database from 1995 to 2015. We find that BRI trade accounted for 3-quarters (5.01 Gt) of global traded emissions in 2015. BRI countries account for 60%–75% of (non-BRI) developed-world consumption-based emissions. While developing (BRI) countries import 8%–42% of their consumption needs from China, they account for half of the China’s imported emissions. Our analysis reveals that technological adjustments in export sectors significantly alter the magnitude of outsourcing and emission responsibility assigned to both BRI and non-BRI countries. This leads to a notable shift in net trade balance emissions. We find that developed (BRI and non-BRI) countries have reduced emissions primarily through decoupling and outsourcing. Our findings demonstrate that BRI trade has diverse environmental effects; exports from more carbon-efficient (BRI and non-BRI) developed countries are likely to reduce (or avoid) emissions in developing (BRI) countries and vice versa. An important implication of these findings is that China’s BRI-led outsourcing and investments have the potential to yield significant environmental benefits by accelerating the transition to renewable energy in developing countries participating in the initiative.

Indonesia's contribution to global carbon flows: Which sectors are most responsible for the emissions embodied in trade?

Indonesia's contribution to global carbon flows: Which sectors are most responsible for the emissions embodied in trade?

Tracing two decades of carbon emissions using a network approach

According to the guidelines of the Intergovernmental Panel on Climate Change, carbon emissions are attributed to the producers of goods and services. This approach has been challenged by recent literature, advocating an attribution criterion based on consumers, i.e. accounting for the carbon embedded into the goods imported by each country. Quantifying the effectiveness of such a consumption-based accounting requires understanding the complex structure of the graph induced by the flows of emissions between world countries. To this aim, we have considered a balanced panel of a hundred of countries and constructed the corresponding Carbon Trade Network for each of the past twenty years. Our analysis highlights the tendency of each country to behave either as a ‘net producer’—or ‘net exporter’—of emissions or as a ‘net consumer’—or ‘net importer’—of emissions; besides, it reveals the presence of an unexpected, positive feedback: despite individual exchanges having become less carbon-intensive, the increasing trade activity has ultimately risen the amount of emissions directed from ‘net exporters’ towards ‘net importers’. Adopting a consumption-aware accounting would re-distribute responsibility between these two groups, possibly reducing disparities.

Trade-Embedded GHG Emission Transfer between South Korea and the EU

Purpose - The purpose of this study is to examine the implications of the Carbon Border Adjustment Mechanism (CBAM) for the transfer of greenhouse gas emissions (GHGs) through bilateral trade between Korea and the EU. Therefore, this study points out CBAM’s observable adverse effects from a consumption-based accounting perspective and suggests the proportion of the CBAM levy that should be refunded to Korea’s carbon reduction technology development fund as a way to address this. Design/Methodology – This study uses a multi-regional input-output (MRIO) model to analyze the extent to which industry-specific GHGs are transferred to each other due to bilateral trade between Korea and the EU. Then, using the emissions embodied in the bilateral trade (EEBT) model, we calculate the CBAM levy in Korea and the amount of funds that should be returned to carbon reduction technology development as an example. Findings – Our results show that Korea is a net exporter of GHGs to the EU’s final demand, and that the EU’s consumption-based GHGs are about twice as large as Korea’s when calculating each other’s consumption-based GHGs based on the industries covered by CBAM. In addition, we calculate the intensity-based shared responsibility of Korea and the EU for emissions exported from Korea to the EU to calculate the proportion of the CBAM levy that Korea should refund, and show an example. Originality/value – This study, unlike the existing literature on consumption-based emissions, calculates the transfer of GHGs from bilateral trade between Korea and the EU from the perspective of consumption-based accounting and provides implications for CBAM. It also argues that using the EU’s CBAM revenues to develop carbon reduction technologies in countries exporting to the EU could be more effective in reducing GHGs. Additionally, it emphasizes the need for the international monitoring of the EU’s CBAM revenues to ensure fairness and transparency.

An interregional environmental assessment framework: revisiting environmental Kuznets curve in China.

Achieving the national emission reduction targets requires joint efforts of all jurisdictions, whose sustainable development is affected by complex economic and environmental interactions among regions. An interregional environmental assessment (IREA) framework is constructed for China using multiregional input-output techniques to unravel the carbon emission connections behind interregional economic activities. Then, consumption-based emission accounting is applied in sustainability assessment, in comparison with production-based environmental Kuznets curve (EKC) tests to examine the role of regional connections in shaping EKC. Empirical results expose significant asymmetric CO2 transfer among regions in China, where the Central and Western regions have become CO2 haven for the Eastern region. EKC is valid at the national level and manifests marked regional differences between production- and consumption-based curves. The pollution haven effect alters the EKC curve by expediting the emission peak in the developed Eastern region while delaying it in the developing Western region. Thus, revisiting EKCs in the IREA framework reveals that ignoring interregional connections would lead to misleading results. Only when both production- and consumption-based EKCs transcend their turning points can we claim that environmental governance has ushered in a new era of sustainable development.

Redefining virtual water allocation in China based on economic welfare gains from environmental externalities

Redefining virtual water allocation in China based on economic welfare gains from environmental externalities

The booming non-food bioeconomy drives large share of global land-use emissions

The booming non-food bioeconomy drives large share of global land-use emissions

How robust are current narratives to deal with the urban energy-water-land nexus?

How robust are current narratives to deal with the urban energy-water-land nexus?

Territorial and Consumption-Based Greenhouse Gas Emissions Assessments: Implications for Spatial Planning Policies

The quantification of greenhouse gas (GHG) emissions is increasingly important in spatial planning for regions, cities, and areas. The combination of territorial and consumption-based accounting (CBA) approaches can currently be considered best practice for calculating GHG emissions at sub-national levels, in terms of informing local decision-making about the different climate impacts of spatial planning policies, both within the boundaries of a given region and for the inhabitants of that region. This study introduces four European case studies that were conducted using the two quantification approaches to assess the climate impacts of locally relevant planning policies. The case studies represent different scales of spatial planning, different European planning systems, and different situations in terms of data availability. Territorial results are not suitable for inter-regional comparison, but rather for internal monitoring, while CBA allows for comparison and provides a comprehensive picture of the global carbon footprint of residents, however, with indications that are more difficult to link to spatial planning decisions. Assessing impacts, and in particular interpreting results, requires both methodological understanding and knowledge of the local context. The results of the case studies show that setting climate targets and monitoring the success of climate action through a single net emissions figure can give false indications. The study shows that the two approaches to quantifying GHG emissions provide complementary perspectives on GHG emissions at the sub-national level and thus provide a more thorough understanding of the GHG emission patterns associated with spatial planning policies. The identification of the regional differences in GHG emission sources and mitigation potentials are the main functions of sub-national GHG inventories and the impact assessment for spatial planning. Harmonization of the data collection for sub-national GHG inventories and the transparency of underlying assumptions would greatly support the coherence of climate action and the implications to spatial planning.

Allocating China's CO2 Emissions Based on Economic Welfare Gains from Environmental Externalities.

To achieve carbon neutrality (i.e., net zero carbon emissions) by 2060, China must make significant changes in its socioeconomic systems, including appropriately allocating emissions responsibility. Traditional methods of delineating responsibilities (such as production-based and consumption-based accounting) can lead to double counting when applied simultaneously and therefore difficulty in determining responsibilities of different agents. An alternative approach based on economic welfare gains from environmental externalities has been refined, ensuring that the responsibilities of consumers and producers add up to the total emissions. The application of this approach to 48 countries and 31 Chinese provinces reveals that regions with less elastic supply and demand, such as Hebei in China and Russia, have higher responsibilities. Furthermore, larger externalities associated with unitary product value shift the burden of obligations from producers to consumers. Regions with high levels of wealth and carbon-intensive imports, such as Zhejiang and Guangdong in China, as well as the United States, typically have higher consumer-based accounting (CBA) emissions than production-based accounting (PBA) emissions and, as a result, redistributed responsibilities between PBA and CBA emissions. The new distribution results vary significantly from PBA or CBA emissions, indicating opportunities for more comprehensive and accessible policy goals.

Emissions intensity comparisons and consumption-based CO2 accounting of transportation services

As the international division of labour becomes more entrenched, the distance goods travel before they reach the final consumer increases; at least this was the case before the outbreak of the COVID-19 pandemic. International trade and cross-border cargo movements generate significant carbon emissions. Despite theoretical advances, empirical studies frequently draw contradictory conclusions and the influence of international trade on a country's decarbonization efforts is inconclusive. This study examines the carbon emissions caused by countries' transportation services on global value chains. The input-output (IO) model and the 2015 multi-regional environmental input-output table from the UNCTAD-Eora database are employed. The input-output approach was used to determine the carbon emissions generated by the transport sector, along global value chains, in 190 countries. Environmentally extended IO analysis then reallocates emissions responsibilities of the transport sector from production to consumption. The study identifies which country's transport sectors add more value or emit more CO2. Our findings indicated that: (1) the transportation industry of a country may have a detrimental effect on the environment while generating minimal economic benefit; and (2) a country's transport industry may be tightly related to global value chain operations, but does not create considerable environmental impact. Given the significant differences in emissions intensity, we propose not only calculating the production-based accounting (PBA) of CO 2 emissions, but also the consumption-based accounting (CBA). If CBA emissions are lower than PBA emissions, a country's transport sector is in carbon-leakage credit. The top three countries with the highest carbon-leakage credit for the transport sector were China, Russia and USA. If carbon emissions are taken into consideration, some nations may cease to possess a comparative advantage in manufacturing and trade. Carbon emissions • Input-output model (IO model) • Global value chains (GVCs) • Consumption-based accounting (CBA) • Production-based accounting (PBA)

Low-Carbon Lifestyles beyond Decarbonisation: Toward a More Creative Use of the Carbon Footprinting Method

There is a growing recognition of the urgent need to change citizens’ lifestyles to realise decarbonised societies. Consumption-based accounting (carbon footprinting) is a helpful indicator for measuring the impacts of peoples’ consumption on climate change by capturing both direct and embedded carbon emissions. However, while carbon footprinting can propose impactful behaviour changes to reduce carbon footprints immediately, it may deflect people’s attention from the much needed but time-consuming efforts to reshape the “systems of provisions” to enable decarbonised living. To propose a more constructive application of carbon footprinting, the paper examines the three cases of using carbon footprinting derived from the 1.5-degree lifestyles project, including citizens’ discussions and experiments in six cities in 2020 and 2021, citizens’ workshops contributing to the local policy development in 2022, and lectures and mini-workshops since 2020. Based on the examination of the cases, the article argues the broader purposes of using scientific data in citizens’ engagement in climate actions, namely to help deepen understanding of the systemic causes of the incumbent carbon-intensive society, to guide discussions on the desired conditional changes to support lifestyles shifts, and to help identify possible risks or negative consequences of changes to specific groups in society. These benefits contribute to developing relevant stakeholders’ essential capacities to promote changes at the individual, collective and public levels toward decarbonised societies.

Beyond production and consumption: using throughflows to untangle the virtual trade of externalities

Understanding how countries contribute to the generation of externalities globally is important for designing sustainable policies aimed at reducing negative externalities such as carbon emissions. Commonly used approaches focus on either producers or consumers, thereby neglecting the role of intermediates. We here introduce the concept of throughflow to comprehensively quantify upstream externalities generated by the supply chains originating from, passing through or ending in a given country. We define the Throughflow Based Accounting (TBA) framework as the decomposition of the throughflow into local, imported, exported and traversing externalities. We illustrate the strength of the TBA by identifying the CO2 emissions caused by supply chains involving the German economy. We show that Germany could use its position in global value chains to help reduce two times more CO2 emissions than measured with usual production- or consumption-based accounting frameworks.