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Domestic reductions are being offset by increased emissions in countries like India and China through the consumption of imported goods and services

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UK's greenhouse gas emissions reductions an 'illusion'

Eifion Rees

2nd February, 2011

The UK may appear to have made great progress in reducing its carbon emissions, but declaring only what it produces, rather than consumes, presents a skewed picture of its carbon responsibilities and the balance sheet

With cuts in greenhouse gases of just under 9 per cent between 2008-9 and approximately 18 per cent since 1990, the UK seems to be well on the way towards achieving its 2050 goal: an 80 per cent reduction in its carbon footprint.

But as a series of reports over recent years has made clear, if imports were factored in to the carbon accounts we would actually be responsible for vastly more harmful emissions than are currently declared.

Eminent scientists including Oxford University professor of energy policy Dieter Helm and chief scientific adviser David Mackay have already called apparent UK success in reducing emissions an ‘illusion’, and the pattern is the same across the wealthy world.

The current ‘production-based’ carbon accounting system adopted as part of the Kyoto Protocol in 1997 allows countries to claim responsibility only for emissions produced within their borders, rather than those contained in the goods they consume, which are often manufactured in polluting factories on the other side of the world.
Including these embedded or outsourced emissions in national tallies would reveal a more realistic, and starker, picture of each country’s carbon accounts and responsibilities.

Small wonder plugging the so-called ‘carbon leakage’ – the process by which a country may claim to have reduced territorial emissions while imports continue to grow – is not high on many nations’ list of priorities.

A 2008 report by the Stockholm Environment Institute (SEI) revealed an 18 per cent increase in emissions related to UK consumption between 1992 and 2004, for example, with those embedded in imports rising from 35 per cent of UK emissions to 67 per cent over the same period.

China's extra emissions


More than 30 per cent of consumption-based emissions were imported in countries including the UK, France, Sweden, Switzerland and Austria in 2004, according to a March 2010 report by the Carnegie Institution.
Consumption-based accounting of CO2 emissions found 6.2 gigatonnes of CO2 (23 per cent of global carbon dioxide emissions) were traded internationally in 2004 – ‘primarily as exports from China and other emerging markets to consumers in developing countries’. It calculated that factoring in net imports would add 4 tonnes to the annual carbon footprint of the average European (currently 11 tonnes a year) and 2.4 tonnes to that of the average American (currently 20 tonnes).

It also revealed that 22.5 per cent of China’s net emissions in 2004 were embodied in goods exported to foreign consumers, primarily in the US, Japan and Western Europe.

Chinese CO2 emissions increased by 45 per cent from 2002 to 2005, according to a 2009 report by the Centre for International Climate and Environmental Research (Cicero): ‘Half of the increase was due to export production, 60 per cent of which was exported to western countries.’

Dr Nick Eyre, leader of the Lower Carbon Futures Group at Oxford’s Environmental Change Institute, says emissions outsourcing will need to be addressed if we want China and other rapidly industrialising countries involved in an effective global climate deal to replace Kyoto.

‘China will certainly raise the fact that the reason its territorial emissions are going up is because – to a considerable extent – it’s the industrial workshop for the world.’

Threat to climate agreement


He adds that border taxes may be one way of adjusting for carbon pricing where it takes place in the world, but this would effectively mean putting a carbon tariff on goods from rapidly industrialising exporting countries. ‘While this might be a sensible thing to do from an emissions perspective it clearly raises huge issues within the international trade regime. Currently trade treaties are seen to trump environmental ones.’

With the Kyoto Protocol due to expire at the end of 2012 and no replacement global framework yet agreed, it would appear to be the perfect time to discuss the introduction of a new carbon-counting system, one that holds countries to account for the emissions they create outside their national borders.

John Barrett of the Stockholm Environment Institute is sceptical that this will happen, however. He says rich importing countries will be in no rush to see the balance books rebalanced, which would see their carbon successes disappear, carbon responsibilities grow and carbon targets get further away.

‘It’s fair to say no one would be eager to lay claim to more emissions, because then they would have a greater chunk of the pie to mitigate against. To deal with that they would then have to introduce policies potentially to restrict the most carbon-intensive products, maybe raise taxes on consumer products... I don’t think a UK government of any political persuasion would have a strong appetite for that.

‘There may be a greater justification for technology transfer being funded by developed countries, however, because China would argue that a third of its emissions are exported,’ he adds.

UK plans to start counting


One major reason for continuing to count territorial emissions is that the alternative is a tougher proposition, and harder to measure, says Adrian Gault, chief economist for the Climate Change Committee (CCC), which advises the government.

‘The production-based accounting system is obviously not wholly satisfactory as it only provides a partial picture, so we would be very happy if we were asked by the government to look at embedded emissions and their implications for the UK and others.’

A Defra spokesman confirmed the government has no current plans to do so, adding: ‘There is ongoing research to assess their impact on our emissions picture. We count our emissions according to international rules followed by all nations, as to do otherwise would risk double counting.’

What Defra and DECC have done is commission SEI to produce consumption-based accounts for the next five years, which from this year will be published alongside the UK’s traditional production-based carbon accounts.

The 2009 figures will be out in September and will put UK emissions into context for the first time, revealing whether a reduction in carbon has been achieved in real terms or simply outsourced to other countries.

For some idea of how the figures will differ, consider that from 1992-2004 more efficient domestic production led to savings worth 148 million tonnes of carbon dioxide, but emissions related to UK consumption grew by 217 million tonnes – a shortfall of 69 million tonnes.

As John Barrett says, outsourced emissions need to be dealt with, not simply monitored. ‘I don’t see a considerable amount of policies being put into place that will attack the carbon embedded in products consumed in the UK. The government will argue that it tackles outsourced emissions through its positive engagement with international negotiations, its commitment to an 80 per cent reduction and by encouraging other countries to join it in signing up to any global deal that materialises.

‘It assumes that every country takes individual responsibility. The reality of that happening is very small and the chance of a true global deal linked to a 2C temperature rise is tiny. The UK needs to demonstrate some commitment that would lead to the desired global outcome of living within certain limits.’

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