Production-based Accounting Research Articles

The roles of the metallurgy, nonmetal products and chemical industry sectors in air pollutant emissions in China

The metallurgy, nonmetal products and chemical industry sectors (MN&C) are the three major industrial sources of air pollutants in China. Previous studies have focused on calculating emissions from MN&C via production-based accounting and identifying the drivers of MN&C using consumption-based accounting. However, these previous studies did not discuss how the total outputs from MN&C upstream and downstream industries influence air pollutant emissions. In this study, we use a pure backward linkage (PBL) method to quantify emissions from industries upstream of MN&C and to evaluate how the downstream industries drive the outputs of MN&C in China. We find that the emissions from industries upstream of MN&C are generally higher than the production-based emissions of MN&C. In particular, the chemical industry largely increased its contribution to air pollution according to the PBL method. Furthermore, much of upstream emissions of MN&C are embodied in the interregional trade, transferring substantial emissions from the eastern region to inland provinces. Regarding the drivers of MN&C, our results reveal that consumption-based accounting underestimates the importance of many sectors. The outputs of these previously underestimated sectors could maximally cover 80% of metallurgy, 85% of nonmetal products and 25% of chemical industry outputs. We suggest that improving the structure of MN&C would considerably help decrease the environmental burden on the entire supply chain. Additionally, improving the productivities of MN&C downstream industries could also address the air pollution caused by MN&C.

Impact of cutting meat intake on hidden greenhouse gas emissions in an import-reliant city

Greenhouse gas emissions embodied in trade is a growing concern for the international community. Multiple studies have highlighted drawbacks in the territorial and production-based accounting of greenhouse gas emissions because it neglects emissions from the consumption of goods in trade. This creates weak carbon leakage and complicates international agreements on emissions regulations. Therefore, we estimated consumption-based emissions using input-output analysis and life cycle assessment to calculate the greenhouse gas emissions hidden in meat and dairy products in Hong Kong, a city predominately reliant on imports. We found that emissions solely from meat and dairy consumption were higher than the city’s total greenhouse gas emissions using conventional production-based calculation. This implies that government reports underestimate more than half of the emissions, as 62% of emissions are embodied in international trade. The discrepancy emphasizes the need of transitioning climate targets and policy to consumption-based accounting. Furthermore, we have shown that dietary change from a meat-heavy diet to a diet in accordance with governmental nutrition guidelines could achieve a 67% reduction in livestock-related emissions, allowing Hong Kong to achieve the Paris Agreement targets for 2030. Consequently, we concluded that consumption-based accounting for greenhouse gas emissions is crucial to target the areas where emissions reduction is realistically achievable, especially for import-reliant cities like Hong Kong.

Technology-adjusted national carbon accounting for a greener trade pattern

Crediting green trade patterns is essential for effective national carbon accounting. Neither production- nor consumption-based accounting satisfies this condition. Thus, Kander et al. [Kander, A., Jiborn, M., Moran, D.D., Wiedmann, T.O., 2015. National greenhouse-gas accounting for effective climate policy on international trade. Nature Climate Chang. 5(5):431–435.] proposed a technology-adjusted consumption-based carbon accounting method that focuses on interregional differences in sectoral carbon intensity. The intermediate input structure is also closely related to the production technology level. Therefore, this study recommends a new technology-adjusted consumption-based carbon accounting framework that distinguishes between direct and cumulative exports, forward and backward industrial linkages, and different trade patterns. Based on the consideration that production-based accounting will remain the core indicator for regional emissions in the near future, this study proposes a technology-adjusted production-based accounting framework. The empirical study is based on the World Input-Output Database, and the results indicate that technology-adjusted carbon accounting will redraw the global emissions map if the intermediate input linkage is considered. The technology-adjusted carbon accounting method satisfies the conditions of additivity, sensitivity, monotonicity, and scale invariance, through proper selection of the world average emissions multipliers.

Consumption-based versus production-based accounting of CO2 emissions: Is there evidence for carbon leakage?

Lately, a controversial debate has evolved regarding consumption-based accounting (CBA) versus production-based accounting (PBA) of CO2 emissions. So far, the debate has been predominately theoretical and has inspired only a few empirical studies. In this article, we compare production-based versus consumption-based emissions, and for the first time analyze reasons for the differences. In particular, we focus on whether there is evidence for carbon leakage from developed to developing countries. We use the newest available data for 110 countries and analyze whether there are differences between OECD and non-OECD members. Furthermore, we compare the within-country differences for the time span of 1997 to 2011 via fixed effects panel regression models in order to investigate whether increases in GDP per capita result in higher imported emissions. The results suggest that for most countries the differences depending on accounting schemes are small. Furthermore, we find no evidence for carbon leakages. In particular, the ratio of CBA to PBA is not driven by OECD membership or GDP per capita. Instead, the ratio is greater for countries with high energy efficiency and high import rates. Given the small differences between PBA and CBA, we suggest keeping the production-based accounting of CO2 emissions.

From production-based to consumption-based regional carbon inventories: Insight from spatial production fragmentation

The key distinction between production-based and consumption-based accounting lies in the way in which trade-embodied emissions are allocated between producer and consumer regions. Yet, these two regions are not necessarily directly connected to each other in supply chains, due to spatial production fragmentation. To better understand the link from the production-based to the consumption-based regional carbon inventories, this paper defines the economic length of carbon transfer (ELCT) as the number of administrative border-crossing involved in the influence process of a region’s final demand on the carbon emissions of another region. Using a multi-regional input-output analysis framework for China, we propose an approach to calculating the ELCT related to a region’s production or demand for domestic consumption or international export. We find that the average ELCT in 2010 is 1.34 and that more than a quarter of interregional carbon transfer crosses provincial borders twice or more. The provincial and sectoral analysis of ELCT reveals that spatial production fragmentation is an important challenge to be conquered for successful implementation of consumption-based climate regulations.

Understanding the energy metabolism of World economies through the joint use of Production- and Consumption-based energy accountings

Understanding the energy metabolism of national economies is nowadays crucial for policymakers in order to define effective policies and to properly set energy efficiency targets. Energy accountings based on the traditional Production-based accounting method (PBA) allows to understand how primary energy is directly extracted, traded, transformed and used within each economy. On the other hand, Consumption-based accounting method (CBA) allows to understand the ultimate economic purposes of such energy flows. The information provided by the joint application of these approaches may provide useful and complementary insight on the national energy metabolism, allowing to identify hotspots for potential interventions from both the supply and demand side.This paper reviews PBA and CBA energy accounting methods, presenting a possible way for the joint use of their results, consistently represented by means of one unique Sankey diagram. This will be useful to have a comprehensive insight on the energy metabolism of national economies, supporting analysts and policymakers in the identification of energy efficiency hotspots. The method is applied to South Africa and to the neighbor country of Botswana, based on data provided by IEA energy statistics and the EORA26 Multi-Regional Input-Output model, taking into account non-renewable fossil energy (raw coal, crude oil and natural gas) and considering the reference year 2013.Results suggest that the joint use of PBA and CBA methods may provide useful information on the hidden energy links among national economies, helping analysts and policymakers in defining alternative energy efficiency policies. For this reason, the Authors argue that results of CBA should be provided alongside energy statistics based on the traditional PBA approach.

Gas-fired power in the UK: Bridging supply gaps and implications of domestic shale gas exploitation for UK climate change targets

There is a projected shortcoming in the fourth carbon budget of 7.5%. This shortfall may be increased if the UK pursues a domestic shale gas industry to offset projected decreases in traditional gas supply. Here we estimate that, if the project domestic gas supply gap for power generation were to be met by UK shale gas with low fugitive emissions (0.08%), an additional 20.4MtCO2e11Megatonne carbon dioxide equivalent (MtCO2e). would need to be accommodated during carbon budget periods 3–6. We find that a modest fugitive emissions rate (1%) for UK shale gas would increase global emissions compared to importing an equal quantity of Qatari liquefied natural gas. Additionally, we estimate that natural gas electricity generation would emit 420–466MtCO2e (460 central estimate) during the same time period within the traded EU emissions cap. We conclude that domestic shale gas production with even a modest 1% fugitive emissions rate would risk exceedance of UK carbon budgets. We also highlight that, under the current production-based greenhouse gas accounting system, the UK is incentivized to import natural gas rather than produce it domestically.

Quantification and driving force analysis of provincial-level carbon emissions in China

Accurately understanding the real situation of China’s carbon emissions at the provincial level is not only crucial for realizing carbon mitigation in China, but also of great importance for tackling climate change on a global scale. This paper uses detailed energy consumption data subdivided within each fuel type and sector-specific emission factors, to calculate both direct and indirect energy-related CO2 emissions for China’s provinces, and offers provincially-targeted policy proposals on emission reductions. The results uncover large divergences in calculation of provincial CO2 emissions between production-based and consumption-based accounting approaches. Considering the large amount of interprovincial CO2 emission transfers embodied in secondary energy deployment, the consumption-based accounting performs better in reflecting the actual features and responsibilities of carbon emissions in the provinces of China. From the consumption perspective, Shandong, Hebei, Jiangsu, Inner Mongolia, Guangdong, Henan, Liaoning and Shanxi contributed to the majority of China’s carbon emission growth during the period of 1996–2013, while Xinjiang, Sichuan, Anhui, Tianjin and Hunan were playing an increasingly important role. These two groups of provinces should be regarded as the key regions for national emissions abatement. Meanwhile, the energy industry was the top sectoral contributor to CO2 emissions growth in most provinces, while service and household sectors made increasingly significant impacts on driving up provincial emissions. Together with ongoing efforts in the energy sector, the mitigation of CO2 emissions in service and household sectors deserves much more attention, especially in the transportation and urban household sectors. Furthermore, the temporal trends of carbon emissions in various provinces, as well as their factor and sectoral driving forces, varied greatly with each other. Therefore, each of the provinces should formulate emission reduction policies according to their own situation, and target the key driving factors and sectors of carbon emissions at the current stage or in the near future.

Final production-based emissions of regions in China

ABSTRACTExisting studies focus on either direct emissions of each province in China using production-based accounting (i.e. direct emitters) or emissions caused by the final consumption of each province using consumption-based accounting (i.e. final consumers), but overlook provinces whose final sales drive large amounts of upstream emissions (i.e. final producers). Improving the production efficiency of the latter can help to reduce national emissions. Here we use a final production-based accounting framework to identify critical final producers. Results show that the major final producers leading to China’s emissions are Hebei, Shandong, Jiangsu, Zhejiang, and Guangdong, which are the major manufacturing centers in China. China should encourage the production efficiency improvement of dominant firms in industries of these provinces. The final production-based accounting framework can also help to define and allocate emission responsibilities of Chinese provinces. It can complement production-based and consumption-based accounting frameworks to guide environmental policy-making in China.

Income-Based Greenhouse Gas Emissions of Nations

Accounting for greenhouse gas (GHG) emissions of nations is essential to understanding their importance to global climate change and help inform the policymaking on global GHG mitigation. Previous studies have made efforts to evaluate direct GHG emissions of nations (a.k.a. production-based accounting method) and GHG emissions caused by the final consumption of nations (a.k.a. consumption-based accounting method), but overlooked downstream GHG emissions enabled by primary inputs of individual nations and sectors (a.k.a. income-based accounting method). Here we show that the income-based accounting method reveals new GHG emission profiles for nations and sectors. The rapid development of mining industries drives income-based GHG emissions of resource-exporting nations (e.g., Australia, Canada, and Russia) during 1995-2009. Moreover, the rapid development of sectors producing basic materials and providing financial intermediation services drives income-based GHG emissions of developing nations (e.g., China, Indonesia, India, and Brazil) during this period. The income-based accounting can support supply side policy decisions and provide additional information for determining GHG emission quotas based on cumulative emissions of nations and designing policies for shared responsibilities.

Exploring the characteristics of production-based and consumption-based carbon emissions of major economies: A multiple-dimension comparison

Addressing climate change requires the efforts of all countries with common but differentiated responsibilities. The mitigation responsibilities one country takes greatly depends on its national emission inventories. As a good complement to the production-based accounting (PBA) principle, consumption-based accounting (CBA) principle has been widely concerned. However, few studies focus on emissions equity issues temporally and spatially. In this paper, we explore the characteristics of production-based and consumption-based CO2 emissions for 14 major economies through multiple-dimension comparisons to get insight into the emissions equity comparisons among major emitters. In particular, four categories of economies with different dynamic features are divided based on their percentage differences between PBA and CBA emissions. Demographical and economic variables are additionally taken into consideration. The results indicate that France and Russia hold extreme characteristic on evaluating the emission difference between two principles, while China and Chinese Taiwan reveal uniquely increasingly larger gaps between two principle emissions. Besides, the per capita CBA emissions grows more prominently and possesses a more obviously positive correlation with their own per capita GDP which confirms that CBA principle is potentially attractive for estimating national emissions.

The global EKCs

A substantial fraction of the production in the emerging economies satisfies the consumption in the developed countries. This causes the notorious carbon leakage problem where the embodied carbon emissions in exports are not counted in the traditional territorial production-based emission accounting (PBA). We calculate the consumption-based emissions using latest available Eora data in a multiregional input–output (MRIO) model and then perform fixed effect and random effect panel regressions, dynamic panel regression, and heterogeneous panel regressions using the PBA data and consumption-based accounting (CBA) obtained from the MRIO model. The results show that the inverted-U-shaped Environmental Kuznets Curve (EKC) does not exist for CBA. Indeed, results obtained in this paper show that the consumption-based EKC is linearly increasing.

Did I say dog or cat? A study of semantic error detection and correction in children

Although naturalistic studies of spontaneous speech suggest that young children can monitor their speech, the mechanisms for detection and correction of speech errors in children are not well understood. In particular, there is little research on monitoring semantic errors in this population. This study provides a systematic investigation of detection and correction of semantic errors in children between the ages of 5 and 8years as they produced sentences to describe simple visual events involving nine highly familiar animals (the moving animals task). Results showed that older children made fewer errors and corrected a larger proportion of the errors that they made than younger children. We then tested the prediction of a production-based account of error monitoring that the strength of the language production system, and specifically its semantic–lexical component, should be correlated with the ability to detect and repair semantic errors. Strength of semantic–lexical mapping, as well as lexical–phonological mapping, was estimated individually for children by fitting their error patterns, obtained from an independent picture-naming task, to a computational model of language production. Children’s picture-naming performance was predictive of their ability to monitor their semantic errors above and beyond age. This relationship was specific to the strength of the semantic–lexical part of the system, as predicted by the production-based monitor.

A critical examination of the consumption‐based accounting approach: has the blaming of consumers gone too far?

A series of studies has recently used emissions embodied in net imports (EENI) to argue for the consumption‐based accounting (CBA) approach. These publications have been generating much attention from the media and academia for ‘providing an opportunity to inform effective climate policy’. However, policymakers must be cautious when considering if CBA can be used to replace or just to supplement current practice of production‐based accounting (PBA). Terms such as ‘carbon leakage’, ‘emissions transfers’, and ‘CO2 outsourcing’ have been uncritically overused as there is little evidence that EENI is the result of climate policy. Furthermore, CBA overlooks ‘insourcing’ of polluting industries by producing regions when blaming consumers for emissions. To avoid misinformation, EENI should be called just that. CBA's practicality is limited as it involves more data‐intensive calculations and higher transaction costs than PBA. The success of CBA will rely on consumers to put pressure on producers. Eventually, it is still producers that need to reduce emissions. PBA is more practical by directly placing pressure on producers along with environmental laws and regulations. CBA will be counter‐productive to global emissions control if producers increase emissions due to reduced responsibility over the emissions incurred by the production of their exports. However, CBA could be used to persuade consumers to choose low‐emissions products, support producers' sustainability efforts, and reduce nonbasic consumption. WIREs Clim Change 2015, 6:1–8. doi: 10.1002/wcc.325This article is categorized under: Climate Economics > Economics of Mitigation The Carbon Economy and Climate Mitigation > Policies, Instruments, Lifestyles, Behavior

An Articulatory and Acoustic Study of the Fricative Clusters /sʃ/ and /ʃs/ in Catalan

Elect ropalatographic and acoustic data for the fricative clusters /sʃ/ and /ʃs/ and the single fricatives /s/ and /ʃ/ in Eastern Catalan reveal that, while /sʃ/ undergoes regressive assimilation, /ʃs/ blends into an intermediate fricative or exhibits a twotarget realization. On the other hand, acoustic data for /ʃs/ in Western Catalan show that /s/ may assimilate to preceding /ʃ/ or undergo blending or a two-target realization depending on speaker and prosodic condition (no data are available for /sʃ/ in this dialect). Duration values for the two fricative clusters suggest that the assimilated outcome of /sʃ/ shortens down to the length of /ʃ/. A production-based account of the two sequences /sʃ/ and /ʃs/ in Catalan and other languages is proposed.

Greenhouse Gas Emissions Accounting of Urban Residential Consumption: A Household Survey Based Approach

Devising policies for a low carbon city requires a careful understanding of the characteristics of urban residential lifestyle and consumption. The production-based accounting approach based on top-down statistical data has a limited ability to reflect the total greenhouse gas (GHG) emissions from residential consumption. In this paper, we present a survey-based GHG emissions accounting methodology for urban residential consumption, and apply it in Xiamen City, a rapidly urbanizing coastal city in southeast China. Based on this, the main influencing factors determining residential GHG emissions at the household and community scale are identified, and the typical profiles of low, medium and high GHG emission households and communities are identified. Up to 70% of household GHG emissions are from regional and national activities that support household consumption including the supply of energy and building materials, while 17% are from urban level basic services and supplies such as sewage treatment and solid waste management, and only 13% are direct emissions from household consumption. Housing area and household size are the two main factors determining GHG emissions from residential consumption at the household scale, while average housing area and building height were the main factors at the community scale. Our results show a large disparity in GHG emissions profiles among different households, with high GHG emissions households emitting about five times more than low GHG emissions households. Emissions from high GHG emissions communities are about twice as high as from low GHG emissions communities. Our findings can contribute to better tailored and targeted policies aimed at reducing household GHG emissions, and developing low GHG emissions residential communities in China.

Norm Conflict in Climate Governance: Greenhouse Gas Accounting and the Problem of Consumption

Accounting rules used for compiling national greenhouse gas inventories play a significant role in constituting the global climate change regime's character. These rules have major political and policy implications. Production-based accounting and national production-based emissions targets contribute to the deadlock in climate negotiations by deflecting attention away from consumption patterns and by accentuating tensions among the climate regime's underlying norms. These dynamics contribute to inefficient domestic mitigation policies, conflict over the norm of “common but differentiated responsibility,” weak international agreements, and continued political neglect of consumption as a driver of emissions. In contrast, consumption-based emissions accounting would shift attention from production to consumption. Consumption-based targets could potentially provide an alternative path by which differentiated responsibility could be implemented. Adoption of consumption-based inventories might also prompt reappraisal of underlying norms and opposing conceptions of justice among states.

A consumption-based approach to carbon emission accounting – sectoral differences and environmental benefits

In recent years there has been growing concern about the emission trade balances of countries. This is due to the fact that countries with an open economy are active players in international trade. Trade is not only a major factor in forging a country's economic structure, but contributes to the movement of embodied emissions beyond country borders. This issue is especially relevant from the carbon accounting policy and domestic production perspective, as it is known that the production-based principle is employed in the Kyoto agreement. The research described herein was designed to reveal the interdependence of countries on international trade and the corresponding embodied emissions both on national and on sectoral level and to illustrate the significance of the consumption-based emission accounting. It is presented here to what extent a consumption-based accounting would change the present system based on production-based accounting and allocation. The relationship of CO2 emission embodied in exports and embodied in imports is analysed here. International trade can blur the responsibility for the ecological effects of production and consumption and it can lengthen the link between consumption and its consequences. Input–output models are used in the methodology as they provide an appropriate framework for climate change accounting. The analysis comprises an international comparative study of four European countries (Germany, the United Kingdom, the Netherlands, and Hungary) with extended trading activities and carbon emissions. Moving from a production-based approach in climate policy to a consumption-based principle and allocation approach would help to increase the efficiency of emission reductions and would force countries to rethink their trading activities in order to decrease the environmental load of production activities. The results of this study show that it is important to distinguish between the two emission accounting approaches, both on the global and the local level.

The Devil in the Deal: Trade Embedded Emissions and the Durban Platform

Several commentators have expressed concern that the Durban Platform does not include more specific language about the need for equitable mitigation efforts. Meanwhile, other commentators have argued that the differentiated approach adopted by the Kyoto Protocol set up an opposition between the developed and developing nations; resulting in an impasse which has prevented the achievement of adequately ambitious, agreeable and binding mitigation commitments. In this commentary I propose that the political impasse is not due to the equity track per se, but rather to the territorial and production-based accounting system upon which it was built. Under the UNFCCC, parties are required to provide inventories of GHG emissions within their national borders. There are several problems with this method, but most important given the argument here, is that the production-approach has resulted in a significant misrepresentation of the total climate impact of developed nations. Because GHG emissions are not confined by geopolitical borders, it is important to understand the climate impact of contemporary consumption and trade, regardless of where emissions are produced. I argue that supplementing production-based accounting with a consideration of the emissions embedded in trade has the potential to provide a more agreeable and politically viable path for closing the ambition gap and ensuring equity.

Preventing Carbon Leakage with Consumption-Based Emission Policies?

Steep and rapid reductions in greenhouse gas emissions are required from the industrialized countries. An important policy concern is that these emission reductions could lead to increases in emissions elsewhere. This leakage effect can be avoided by suitable choice of policies.I study the greenhouse gas abatement policy of a large coalition of countries that faces competition from countries with laxer emission policies, comparing the changes in emissions from the rest of the world and in competitiveness of dirty industries caused by different policy options. My analysis is based on a two-region, two-good model of endogenous growth with directed technical change.I compare two approaches to allocation of emissions associated with the supply of internationally traded goods and services: production-based and consumption-based accounting. When technical change and complementary policies are omitted, emission constraints based on either approach cause emissions in the rest of the world to increase, although through different mechanisms. However, an emission constraint creates incentives for energy-saving innovation and countries' emission policies can include various complementary measures in addition to the emission constraint. These factors can cause also the rest of the world to reduce emissions. Models that omit these factors yield too low recommendations on emission reduction targets.In order to maximize global emission reductions achieved with unilateral policy, production-based emission constraints should be applied on sectors where there are good possibilities to substitute other inputs for fossil energy, and there are decreasing returns to scale in carbon intensive activities. Consumption-based emission constraints achieve larger global emission reductions in sectors in which fossil energy and other inputs are strongly complementary and returns to scale on the regional level are not strongly decreasing.Complementary policies, such as subsidies to energy efficiency investments, subsidies to R&D of energy-saving technologies, transfer of technology to developing countries and relaxing the protection of intellectual property rights, can reduce or reverse carbon leakage. Each of these policies only reduces global emissions under specific conditions. Choosing suitable policies and differentiating between economic sectors is of great importance.If border measures are applied on imported carbon-intensive goods, it is important to account for the relative carbon intensity of individual producers. A regular border tax levied per tonne of product does not encourage producers in the rest of the world to clean up their production.