Measuring Carbon Dioxide Emissions Embodied in Consumption Paris, November 2010

1. Measuring Carbon Dioxide Emissions Embodied in ConsumptionParis, November 2010 Contact: nadim.ahmad@oecd.org

2. Overview • Policy drivers: • Production versus Consumption (Supplementary index). • Equity

3. Background – Where are we now? • 40% increase in CO2 emissions between 1990 and 2007. • ¼ from OECD economies, but over half from China alone; whose emissions trebled over the period – partly in response to domestic demand but also for OECD consumers. • China’s share of US and Japanese imported goods up from 6.5 and 11% in 1995 to 15.5 and 21% in 2005. Much of this in products with high CO2 emissions. • OECD’s trade balance fallen from broad balance in 1995 to $1.1 trillion deficit in 2005.

4. Methodology • Objective – to allocate emissions (embodied) to final domestic consumption. • Starting point: 3 global IO tables for 1995, 2000 and 2005 for 47 countries. – 95% of global GDP and 85% of emissions. • And CO2 emissions by sector from the IEA

5. OECD Input-Output Database History 1995ed: 10 countries (1970-1990) 2002ed: 24 countries for mid90s 2006ed & current: mid90s-2005 Format Inter-industry transactions (48 sectors) ISIC 3 harmonized classification Import &domestic inputs are separated Database and sample indicators are available at OECD.Stat www.oecd.org/sti/inputoutput +32 OECD countries + 15 non-members (G20, BRIICS, ASEAN6,NAFTA, accession countries, other EU members)

7. Methodology • Very simple approach:

8. Imported emissions embodied in final consumption-% of total consumption

9. CO2 emissions from domestic consumption and production – Mt US per capita emissions from production 5 * China’s in 2005 but 6 * higher with consumption

10. Trade balance in CO2 emissions (domestic production minus domestic consumption) percentage of global emissions 1995 - 2005 Perspective: Higher than total emissions in Germany and growth in deficit between 1995 and 2005 equal to another UK

11. CO2 emissions: tonnes per capita - domestic production and domestic consumption No change in per capita emissions in production between 2000 and 2005 but 2% increase in emissions embodied in consumption Difference in consumption and Production = 30% of per capita emissions in R.O.W

12. Not just a question of Trade surplus/deficits either:Trade in goods balances and CO2 balances (2005)

13. China: Emissions from China embodied in imports: % of total consumption

14. Per capita Changes in Domestic Consumption of CO2 emissions broken down by emission source between 1995 and 2005

15. Emissions embodied in HHFC: Mt per capita, 2005

16. CO2 emissions in Households per unit of Household disposable constant 2000 PPPs, Mt CO2,

17. On-going work • Emissions from unallocated autoproducers • Emissions from the rest of the world • Conceptual challenges relating to emissions embodied in investment and inventories. Focus on final consumption (households and government). • Projection into recent years and back to 1990.