Consumption-based greenhouse gas emissions accounting with capital stock change highlights dynamics of fast-developing countries

Abstract

Traditional consumption-based greenhouse gas emissions accounting attributed the gap between consumption-based and production-based emissions to international trade. Yet few attempts have analyzed the temporal deviation between current emissions and future consumption, which can be explained through changes in capital stock. Here we develop a dynamic model to incorporate capital stock change in consumption-based accounting. The new model is applied using global data for 1995-2009. Our results show that global emissions embodied in consumption determined by the new model are smaller than those obtained from the traditional model. The emissions embodied in global capital stock increased steadily during the period. However, capital plays very different roles in shaping consumption-based emissions for economies with different development characteristics. As a result, the dynamic model yields similar consumption-based emissions estimation for many developed countries comparing with the traditional model, but it highlights the dynamics of fast-developing countries.

Fig. 1

Conceptual illustration of embodied emissions flows associated with emissions accounting. EEE represents emissions embodied in export, EEI represents emissions embodied in import, EECF represents emissions embodied in capital formation, and EECD represents emissions embodied in capital depreciation (utilization). Circle A indicates the scope of production-based accounting, which covers emissions within the targeted region during the targeted year. Circle B indicates the scope of traditional CBA, which covers emissions within and without the targeted region during the targeted year. Circle C indicates the scope of dynamic CBA, which covers emissions within and without the targeted region before and during the targeted year. The traditional footprint is calculated as territorial emissions plus EEI less EEE, while the dynamic footprint is calculated as territorial emissions plus EEI and EECD less EEE and EECF. Note that the sizes of the three circles do not necessary represent the relative value of the indicators. For example, territorial emissions of a country can be larger than the traditional footprint when emissions embodied in export exceed those embodied in import

Fig. 2

Territorial emissions and dynamic footprint of the world. The global dynamic footprint is smaller than the direct territorial emissions during the period and the gap is more remarkable for CO₂ than the other two GHG types. The dynamic footprint is the aggregation of household direct emissions, emissions embodied in final household consumption, and emissions embodied in final non-household consumption. GHG emissions are calculated as the sum of CO₂, CH₄, and N₂O emissions based on the relative global warming potentials of 100 years with climate change feedback, which are 1, 34, and 298, respectively

Fig. 3

Sankey diagram of embodied GHG flows of the world in 2009 under dynamic footprint accounting. Capital stock is shown to be an important source as well as destination of GHG flows. The industrial structure from production-based perspective is very different from that from consumption-based perspective. Sector definition is reported in Supplementary Table 1

Fig. 4

National per-capita territorial emissions, traditional footprint, and dynamic footprint (average of 1995–2009). The position of the vertical short line represents territorial PBA emissions; the free end of the upper line represents the country’s dynamic footprint; and the free end of the lower line represents the traditional footprint. Values are indicated on the horizontal axis. By way of an example, China’s dynamic footprint is lower than its traditional footprint, while both CBA measures are lower than is territorial PBA emissions

Fig. 5

Global emissions embodied in capital stock in 1995, 2000, 2005, and 2009. Others includes Indonesia, Mexico, Turkey, and rest of the world, see Supplementary Table 3. Absolute value in GtCO₂e shown represents global total

Fig. 6

Per-capita dynamic footprint and emissions embodied in major bilateral trade flows in 2009. The region in the dotted box represents the EU. The color of the territory indicates national per-capita dynamic footprints. The numbers associated with bilateral trade are total embodied emissions (outside parentheses) and cumulative embodied emissions (inside parentheses). The arrow illustrates the GHG emissions embodied in the goods produced in one region and transported to another, but does not necessarily imply any net regional emissions change caused by the trade