Presented at the 4th International Conference on Carbon Accounting 25th November 2011 www.icarb.org

1. The Role of Governments in Dealing with
Consumption-Based Accounting
Prof. John Barrett
University of Leeds
November 25th ,2011

2. Question 1 – How do assessments of the UK’s
Greenhouse Gas Emissions differ when measured
on a consumption rather than production basis?
Source: ECC Consultation Document

3. Territorial and Consumption-
based Emissions
1,300
1,200
1,100
1,000
CO2e (mt)
Kyoto greenhouse gas basket
900
Full Territorial
800 Consumer
700
600
500
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Source: Wiedmann and Barrett (2011), Wiedmann et al (2010)

4. Question 2 - Is it possible to develop a robust
methodology for measuring emissions on a
consumption- rather than production-based
approach to greenhouse gas emission accounting?
Source: ECC Consultation Document

5. Robust Measurements
ONS Environmental Accounts ("producer emissions")
850 UK Carbon Footprint ("consumer emissions")
Emissions reported to UNFCCC (UK territorial emissions)
800
CO2 emissions (Mt CO2)
750
700
650
600
550
500
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year
Total UK CO2 emissions from 1992 to 2004 according to different accounting principles et al (2010)
Source: Lenzen
(in megatonnes of CO2)

6. Robust Measurements
Source: Lenzen et al, 2010

7. Question 3 - What are the benefits and
disadvantages associated with taking a
consumption-based rather than production based
approach to greenhouse gas emissions accounting?
Source: ECC Consultation Document

8. Drivers of CO2e Emissions
300000
200000
100000 Carbon Intensity
Consumption Basket
CO2e (000 tonnes)
Final Demand
0 Production Structure
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Household Sizes
Population
-100000 Total
-200000
-300000
Source: Baicohhi and Minx (2009)

9. Measure of Progress
1.20
1.00
0.80
Index where 1990 = 1
0.60 Territorial Emissions
Consumption-Based Emissions
0.40
0.20
-
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Source: University of Leeds (unpublished)

10. Understanding Key Products
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
UK "Rest of World" Emissions
UK Production Emissions
Source: Barrett. Sakai and Owen, 2011

11. Policy Impact
Source: Defra, 2009

12. Question 4 - Is there any evidence of industry
relocating from the UK to other countries as a
result of UK Climate Change policy?
Source: ECC Consultation Document

13. Carbon Leakage
Strong carbon leakage refers to an increase in global emissions due specifically to
climate policy (e.g., UK Climate Change policy).
Weak carbon leakage refers to an increase in global emissions due to increased
consumption (that is, no specific government policy is isolated as the causing factor).
Source: Barrett et al, 2011

14. Scale of Traded Emissions - Steel
UK China Japan Germany United Kingdom
Russian
USA China USA
Federation
China China
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Share of domestic consumption by country of origin of steel
Source: University of Leeds

15. Understanding Border Taxes
Source: University of Leeds

16. Question 5 - Would it a) desirable and b) practical
for the UK to adopt emissions reduction targets on
a consumption rather than production basis?
Source: ECC Consultation Document

17. Question 6 - What are the potential implications at
the international level of the UK adopting a
consumption-based rather than production based
approach to greenhouse gas emissions accounting?
Source: ECC Consultation Document

18. Question 7 - Are there any other issues relating to
consumption-based emissions reporting that you
think the Committee should be aware of?
Source: ECC Consultation Document

19. Understanding the Future
1,400,000
1,200,000
1,000,000
Direct Households
800,000 Primary Sectors
kt CO2e
Energy
600,000 Transport
Services
400,000 Goods
200,000
-
2004 2010 2015 2020 2025 2030 2035 2040 2045 2050
Source: Barrett and Scott, 2011

20. Understanding Policy Options
595000
575000
Continuing Trends Scenario
EU ETS
CCL and REO
555000 Boiler - CERT
Cavity Wall - CERT
Glazing - CERT
535000 Loft Insulation - CERT
Cold appliances (with HRF) - CERT
Lighting (with HRF) - CERT
Raising product standards
515000
Consumer electronics
495000
475000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29

21. Understanding Policy Options
Source: McKinsey