Outsourced Emissions: Counting Imports Jacks Up U.S., European Greenhouse Gas Totals

The Environmental Protection Agency estimated recently that the United States emitted about 6,946 million tons of carbon dioxide-equivalent greenhouse gases in 2008. Or did it?

According to a study published this week in Proceedings of the National Academy of Sciences, taking a look at what Americans consume as well as what they produce could add more than 10 percent to the total.

Global carbon dioxide emissions are generally measured based on production — if a good is produced in country X, then the associated emissions are blamed on that country. But what if the good is shipped to country Y, and consumed there?

Consumption-based accounting of greenhouse gas emissions paints a different picture of who is to blame for global emissions, and experts say ignoring the consumption side in international treaty negotiations leaves out a huge part of the whole picture.

“Manufacturing goods produces CO2, but where the emissions occur and where the goods are consumed are two different things,” said lead study author Steven J. Davis, of Stanford University’s Carnegie Institution for Science.

“Once all the dust settles and the analysis is done what you see is that there is a large flux of positive trade from developing countries to developed countries like the U.S., Europe and Japan.”

The study by Davis and Ken Caldeira, also of Stanford, looked at what Davis described as the opposite extreme from the currently used production-based emissions scenario. Using comprehensive international trade data from 2004 — the most recently available set — they showed that the United States actually “outsources” 10.8 percent of its consumption-based emissions. In other words, of all the goods the U.S. consumes, more than one-tenth of the greenhouse gases associated with their production actually is emitted elsewhere.

Biggest Exporter

The primary “elsewhere” in question is, not surprisingly, China.

Almost a quarter of China’s emissions from goods produced in the country are actually exported around the world. Many of those exports go to the U.S., but Western Europe is also a big recipient.
And because of limited manufacturing, some European countries actually have among the highest net outsourcing of emissions. Switzerland, for example, outsources more than half of its consumption-based emissions.

This alternate method of accounting for the total amount of greenhouse gases in the atmosphere, while unlikely to be completely adopted by international negotiators, still could affect how global treaties turn out.

“Internationally [consumption-based approaches] could play an interesting role,” said Glen Peters, a senior research fellow at the Center for International Climate and Environmental Research in Oslo, Norway. “They emphasize that rich countries actually have more responsibility for emissions they currently accept. Rich countries can expand their consumption and have the emissions occur in distant lands. They need to acknowledge and address this.

"Consumption-based approaches should not, however, be used by poor countries to get out of emission reductions. Consumption-based approaches should be used to design more efficient policy, not to avoid reducing emissions.”

China, for example, could focus on its huge exported emissions totals — about 1.4 gigatonnes of CO2, dwarfing other major exporters like Russia, at about 0.4 gigatonnes — as a way to avoid responsibility for reducing those emissions.