Measuring responsibility Extraction? Production? Consumption?

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1 Measuring responsibility Extraction? Production? Consumption? Robbie Andrew 1, Glen Peters 1 & Steve Davis 2 1 CICERO, Oslo 2 U. California at Irvine, USA

2 The role of international trade in climate policy Extraction, Production, Consumption Robbie Andrew 1, Glen Peters 1 & Steve Davis 2 1 CICERO, Oslo 2 U. California at Irvine, USA

3 The Global Carbon Budget 2013 More information, data sources and data files at Contact: Corinne Le Quéré More information, data sources and data files at Contact: Philippe Ciais

4 Fossil Fuel and Cement Emissions Global fossil fuel and cement emissions: 9.7 ± 0.5 GtC in 2012, 58% over 1990 Projection for 2013 : 9.9 ± 0.5 GtC, 61% over 1990 Uncertainty is ±5% for one standard deviation (IPCC likely range) With leap year adjustment: 2012 growth rate is 1.9% and 2013 is 2.4% Source: Le Quéré et al 2013; CDIAC Data; Global Carbon Project 2013

5 Observed Emissions and Emissions Scenarios Emissions are on track for ºC likely increase in temperature above pre-industrial Large and sustained mitigation is required to keep below 2ºC Emissions from fossil fuels and cement Linear interpolation is used between individual data points Source: Peters et al. 2012a; CDIAC Data; Global Carbon Project 2013

6 Common but differentiated How to distribute the mitigation challenge? UNFCCC on the basis of equity common but differentiated responsibilities respective capabilities developed country Parties should take the lead

7 Territorial Emissions as per the Kyoto Protocol The Kyoto Protocol was negotiated in the context of emissions in 1990 The global distribution of emissions is now starkly different Source: CDIAC Data; Le Quéré et al 2013; Global Carbon Project 2013

8 Consumption Emissions per the Kyoto Protocol The net emissions transfers into Annex B countries (black line) more than offsets the Annex B emission reductions achieved within the Kyoto Protocol Territorial: Dark lines Consumption: Light lines In Annex B, production-based emissions have had a slight decrease. Consumption-based emissions have grown at 0.5% per year, and emission transfers have grown at 12% per year Source: Le Quéré et al 2013; Peters et al 2011;Global Carbon Project 2013

9 Annex B versus non-annex B Countries Annex B countries have emission reduction commitments in the Kyoto Protocol Annex B countries do not necessarily have highest economic activity per capita GDP is measured in Market Exchange Rates Source: CDIAC Data; Unstats; Global Carbon Project 2013

10 Top Fossil Fuel Emitters (Absolute) Top four emitters in 2012 covered 58% of global emissions China (27%), United States (14%), EU28 (10%), India (6%) With leap year adjustment in 2012 growth rates are: China 5.6%, USA -4.0%, EU -1.6%, India 7.4%. Source: CDIAC Data; Le Quéré et al 2013; Global Carbon Project 2013

11 Top Fossil Fuel Emitters (Per Capita) Average per capita emissions in 2012 China is growing rapidly and the US is declining fast Source: CDIAC Data; Le Quéré et al 2013; Global Carbon Project 2013

12 Historical Cumulative Emissions by Country Cumulative emissions from fossil-fuel and cement were distributed ( ): USA (26%), EU28 (23%), China (11%), and India (4%) covering 64% of the total share Cumulative emissions ( ) were distributed USA (20%), EU28 (15%), China (18%), India (5%) Source: CDIAC Data; Le Quéré et al 2013; Global Carbon Project 2013

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14 Why International Trade? International trade connects countries Ultimate excuse for inaction Two sides of the one coin Carbon Leakage Competitiveness concerns

15 The emissions supply chain Extraction Production Production Consumption

16 Extraction Gt 24.0Gt 26.7Gt 29.2Gt EU27 United States China Middle East Russia United Kingdom Poland Germany Rest of EU27 Sub-Saharan Africa Canada Australia Rest of ex-ussr India North Africa Rest of World Exported Domestic Gt CO 2 EtoP/1

17 Combustion (Territorial emissions = Kyoto) aka Production (approx) Gt 24.0Gt 26.7Gt EU27 United States Germany United Kingdom Italy Rest of EU27 China Russia Japan Middle East India Rest of ex-ussr Rest of World 29.2Gt Imported FF Domestic FF Gt CO 2 EtoP/2

18 Consumption (combusted by households and embodied in consumed goods) Gt 24.0Gt 26.7Gt EU27 United States Germany United Kingdom Italy Rest of EU27 China Japan Middle East Russia India Rest of ex-ussr Rest of World 29.2Gt Imported FF Domestic FF Gt CO 2 Consumption emissions include those embodied in imports, and exclude those embodied in exports EtoC/2

19 Major Flows from Production to Consumption Start of Arrow: fossil-fuel combustion End of arrow: goods and services consumption Values for EU27 is treated as one region. Units: TgC=GtC/1000 Source: Peters et al 2012b

20 Major Flows from Extraction to Consumption Start of Arrow: fossil-fuel extraction End of arrow: goods and services consumption Values for EU27 is treated as one region. Units: TgC=GtC/1000 Source: Peters et al 2012b

21 Changes in net positions Carbon embodied in traded products (net GtCO 2 ) EU27 Imports More net imported emissions in products United States United States Japan China Germany India More net energy imports United Kingdom Rest of Ex-USSR Sub-Saharan Africa Russia Middle East Traded fuels (net GtCO 2 ) Exports Imports Exports

22 Flows 19% China Russia China 9% Russia Venezuela Rest of ex-ussr 21% 14% 13% 13% -3% Middle East North Africa Sub-Saharan Africa 7% 5% 11% Rest of non-oecd Consumers United States EU27 6% 8% 10% 2% 4% 8% 6% Japan Canada Mexico 11% 14% Rest of EFTA 4% 7% 9% 10% Rest OECD 8% 10% MtCO 2 Venezuela 19% -7% 1% 4% -4% -1% -4% 3% Rest of ex-ussr 13% -2% 18% 9% 12% 9% 4% 10% MtCO Middle East 10% 8% 10% 9% 6% 5% 3% 1% -1% 2% 8% 9% 1% 500 North Africa 13% 0% -3% 3% 12% 2% 0% 8% 5% 100 Sub-Saharan Africa 14% 5% 5% 3% 2% 2% 5% 9% -2% 50 Rest of non-oecd United States EU27 9% 9% 10% 13% 14% 4% -2% -2% -3% 1% 1% -4% -12% -10% -7% -5% -6% 6% 7% 3% -2% -2% -3% 7% 10% 6% -9% 1% 3% -3% -13% -5% 2% -5% Japan Extractors Canada Mexico Rest of EFTA Rest OECD 9% 2% -1% -23% 0% 1% -6% 4% -6% 11% 7% 7% 5% 2% -12% 5% -3% 2% 3% -11% 5% 2% 3% -6% -4% 0% 1% 2% 2% 14% 5% 2% % Average annual growth

23 Flows Consumption in EU27 Extraction in China 1997 Log scale % average growth per annum 2007

24 Flows 19% China Russia China 9% Russia Venezuela Rest of ex-ussr 21% 14% 13% 13% -3% Middle East North Africa Sub-Saharan Africa 7% 5% 11% Rest of non-oecd Consumers United States EU27 6% 8% 10% 2% 4% 8% 6% Japan Canada Mexico 11% 14% Rest of EFTA 4% 7% 9% 10% Rest OECD 8% 10% MtCO 2 Venezuela 19% -7% 1% 4% -4% -1% -4% 3% Rest of ex-ussr 13% -2% 18% 9% 12% 9% 4% 10% MtCO Middle East 10% 8% 10% 9% 6% 5% 3% 1% -1% 2% 8% 9% 1% 500 North Africa 13% 0% -3% 3% 12% 2% 0% 8% 5% 100 Sub-Saharan Africa 14% 5% 5% 3% 2% 2% 5% 9% -2% 50 Rest of non-oecd United States EU27 9% 9% 10% 13% 14% 4% -2% -2% -3% 1% 1% -4% -12% -10% -7% -5% -6% 6% 7% 3% -2% -2% -3% 7% 10% 6% -9% 1% 3% -3% -13% -5% 2% -5% Japan Extractors Canada Mexico Rest of EFTA Rest OECD 9% 2% -1% -23% 0% 1% -6% 4% -6% 11% 7% 7% 5% 2% -12% 5% -3% 2% 3% -11% 5% 2% 3% -6% -4% 0% 1% 2% 2% 14% 5% 2% % Average annual growth

25 Dependence on Foreign Carbon Drawing on concepts from Energy Security

26 So what? Whilst ever there is trade, there will be transfers of carbon between regions How does this effect climate policy?

27 Consumption-induced: The increase in net import into Annex B countries was five times greater than the achieved emission reduction Policy-induced: Negligible effect 0.3% of territorial

28 Change Territorial Consumption Policy

29 Policy response Expand coverage of climate policy More countries Border Carbon Adjustments Financial/Technology transfers Does this effect equity?

30 Who gets the emissions? Who gets the income? Wearing Apparel GBR FRA NOR GHG emissions Value added CHN IND GBR MAR FRA USA RUS DEU TUR ITA NOR BGD DNK SWE RoEU27 ROW For clothing consumed in the UK: Most emissions in China, most value added in the UK Andrew et al (in 5 December prep) 2013

31 Who gets the emissions? Who gets the income? Wearing Apparel GBR FRA GHG emissions Value added Agriculture Mining Food EI Mfg NonEI Mfg Transport Services Electricity NOR For clothing consumed in the UK: Most emissions in electricity, most value added in clothing Andrew et al (in 5 December prep) 2013

32 Regulating consumption Supply chain of clothing consumed in the UK Consumer Producers (supply chain) UK China WAP 277 / 6835 UK WAP 335 / India WAP 27 / 1077 China TEX 172 / 4414 China ELY China LEA 433 / / UK TEX 77 / 498 UK OTP 207 / 397 UK ELY 321 / India TEX 20 / 382 India CRP 41 / 158 India TRD 25 / 106 China TEX 69 / 1765 China ELY China CRP China WOL 697 / / / UK ELY 80 / 93 For clothing consumed in the UK, most emissions occur in electricity production in China Andrew et al (in 5 December prep) 2013

33 Headline results Extraction Grown at 3.1%/yr Production Grown at 3.7%/yr Production Grown at 4.6%/yr Consumption

34 Climate Policy and Int. Trade Different way-points : extraction, production, consumption Trade Leakage, Competitiveness Traded components growing fast Consumption leakage offset gains in Kyoto Responses: equity and vested interests Lots of data rich analysis that can be done Lots of intriguing research questions

35 Thank you Robbie Andrew: folk.uio.no/roberan Glen Peters: Steve Davis: