The 2014 IPCC report recognises consumption as an important driver for emissions and highlights the gap between countries’ territorial based and consumption-based emissions as a result of increasing emissions embodied in trade. Most developed countries have increased their consumption-based emissions more than territorial emissions.
While emissions produced within the EU’s territory declined 13% from 1990 to 2010, its actual footprint increased 8%. Countries including Germany, France, Italy, Spain, Sweden and the UK are net importers of carbon embedded in commodities and final products, while countries such as the Czech Republic and Poland are net exporters. However, it is worth noting that more recent analysis found that the absolute amount of embodied carbon in EU imports has stabilised since the financial crisis, and overall the EU footprint has declined.
Complementing territorial approaches from a consumption oriented perspective could explicitly address issues like carbon leakage and for instance identify situations where an apparent reduction of carbon emissions in a country is mainly the result of structural change in which carbon-intensive industries were relocated abroad. Such policies could also more directly address consumption as a driver for rising greenhouse gas emissions.
A result of Carbon-CAP, the analyses in efficiency (emissions, energy and labour per unit output), the changes due to trade related effects (both for intermediate producers and final consumers), the changes due to technology effects (both for intermediate producers and final consumers) and the change due to affluence and population indicated that trade is an important driver for global greenhouse gas emissions growth. However, it is not as important as growth in affluence and overall industry efficiency.
This is only true, however, when looking at global emissions growth. When taking into account regional shifts in greenhouse gas emissions footprints over time, the displacement of industries from developed economies in the European Union and the OECD and the increase in imports to final demand contributes to emissions growth, mainly from combustion. For non-combustion emissions, changes in trade partners seemed to decrease greenhouse gases footprints.
Carbon-CAP also found that different dynamics act on the footprint growth over time and in different regions. Greenhouse gas emissions and energy consumption are mainly driven by the increase of consumption per capita in developing economies, such as China, and in the European Union. This growth in affluence reduces (or even reverses) gains in carbon and energy efficiency.
It could be seen that trade is an important driver for labour footprints change in developed economies, in a higher proportion than for energy and greenhouse gas footprints. That indicated that the displacement of industries to labour-abundant countries might not have a significant effect in the growth of emissions embodied in trade.