1 The Carbon Footprint of Nations A global trade-linked analysis Edgar G. Hertwich and Glen P. Peters Industrial Ecology Programme Norwegian University of Science and Technology Trondheim, Norway 37th LCA Discussion Forum Lausanne 19. 03. 2009
2 Overview Global Carbon Footprint: How large? Where? Why? Who? Consumption cluster Carbon embodied trade; Carbon leakage Border Carbon Adjustments
3 First global assessment GTAP* database 87 world regions 57 sectors For the year 2001 GHG emissions only *Global Trade Analysis Project https://www.gtap.agecon.purdue.edu/
4 Full MRIO Model (1) Mass balance as for total trade Step 1: Split exports between final demand and industry Step 2: Split exports to industry in direct proportions Peters, Ecol.Econ. 2007
5 Full MRIO Model (2) Full MRIO mass balance Interindustry demand Domestic demand Export to industry Export to final demand
6 Full MRIO Model (3) Imports to final demand # x % A A A L A & # x # y 1 11 12 13 1m 1 11 j! 1 1j ( ) ( ( 2 21 22 A y 23 L 2m 2 22 + j! 2 y2j ( x ( ) A A A x ( x ( 3 = ) A31 A32 A33 L A3m x ( 3 + y33 + j 3 y (! 3j ( ) ( ( M ( ) M M M O M M ( M ( x ( ) m Am1 Am2 Am3 Amm x ( +, L. + m, ymm + j! m y ( + mj, + y Import IO coefficients A = sˆ A import ij ij j Domestic IO coefficients
7 CO2 [Gt CO2] Non-CO2-GHG [Gt CO2e] Investment Investment Government Government Households Households 0 5 10 15 20 0 2 4 6 8 Investment Government Households GHG total [Gt CO2e] 0 5 10 15 20 25 Construction Shelter Food Clothing Manufactured products Mobility Service Trade
8 a t i p a c r O e C e p 2 n o t 10 1 10 0 10-1 10 2 10 3 10 4 Expenditure ($ per capita) OECDnw EAsia Eur SAsia SAm ME&NAfr SSAfr RoW
9 p a c r e p e 2 O C n oa t i p a c r e p e 2 O C n o a t i p a c r e p e 2 O C n o t Construction 10 1 10 0 10-1 10-2 10 2 10 4 Clothing 10 1 10 0 10-1 10-2 10 2 10 4 Service 10 1 10 0 10-1 10-2 10 2 10 4 Expenditure ($ per capita) Shelter 10 1 10 0 10-1 10-2 10 2 10 4 Manufactured products 10 1 10 0 10-1 10-2 10 2 10 4 Trade 10 1 10 0 10-1 10-2 10 2 10 4 Expenditure ($ per capita) Food 10 1 10 0 10-1 10-2 10 2 10 4 Mobility 10 1 10 0 10-1 10-2 10 2 10 4 OECD NW East Asia Europe South Asia South America Middle East/North Africa Sub-saharan Africa
10 Importance of categories as a function of wealth a t i p a c r e p e 2 O C n o t 10 2 10 1 10 0 10-1 10-2 10-3 10 2 10 3 10 4 10 5 Expenditure ($ per capita) Construction Shelter Food Clothing Manufactured products Mobility Service Trade GHG footprint elasticity Construction 0.74 Shelter 0.65 Food 0.29 Clothing 0.79 Manufactures 0.88 Mobility 0.83 Service 0.55 Trade 0.88
11 Emissions Embodied in Exports and Imports Peters & Hertwich, Env.Sci.Tech. 2008
12 Carbon Leakage The total emissions embodied in trade from non-participant countries to participant countries In 2001, ca. 5% of total CO 2 emissions.
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14 Underlying dynamics of macro-variables 300 280 260 240 220 200 180 160 140 120 Population GDP Trade CO2 Bunkers Trade is changing faster than most macro-variables 100 1990 1992 1994 1996 1998 2000 2002 2004 2006 Source: GDP/Trade: data.un.org, Population: U.S. Census Bureau, International Data Base, Emissions: TRENDS http://www.nature.com/climate/2008/0804/full/climate.2008.25.html
15 Chinese emissions 1990-2005 5000 4500 4000 3500 Total Emissions embodied in Chinese exports MMt CO2 3000 2500 2000 33% 1500 1000 500 17% 0 17% 19% 18% 21% Huge growth since 2001 1991 1990 1993 1992 1995 1994 2000 1999 1998 1997 1996 2001 2002 2003 2004 2005 Weber, Peters, et al. 2008
16 Carbon leakage GHG emissions for the production of internationally traded products are significant Shifts in trade patterns could have a significant effect on the attainment of emissions targets, e.g. the Kyoto protocol Border Tax Adjustments as mechanism to compensate for economic distortions caused by regional climate policy differences
17 Border Carbon Adjustments (Selected) Products imported from countries without carbon tax or cap&trade systems are taxed according to their (approximate) embodied GHG emissions (Selected) Products exported to regions without carbon tax or cap&trade systems are refunded the tax paid BCA more compatible with tax than with ETS
18 Political efforts USA: Warner-Liebermann act: Procedure to take up emissions with countries that do not have limits/rules; leading to tariffs on selected products Issue likely to reemerge. EU: 2006 EP committee initiative Verheugen Mandelson conflict Australia: topic very pertinent under new government China: keen observer
19 Implications Interest in Carbon Footprint of traded products expected to rise Expertise and overview urgently needed
20 Questions? edgar.hertwich@ntnu.no www.ntnu.no/indecol Edgar Hertwich Industrial Ecology Programme Norwegian University of Science and Technology Trondheim, Norway