Shared responsibility and emission reduction targets

The Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change has been held annually since 1995, initiated by the framework of the same name, originally created in 1992. Under the Kyoto Protocol adopted at COP3 in 1997 and the Paris Agreement adopted at COP21 in 2015, participating countries have set emission reduction targets. For example, under the Paris Agreement, Japan aims to reduce its emissions by 46% compared to 2013 by 2030 and to achieve carbon neutrality by 2050. These emission reductions only concern emissions in Japan, so that, for example, the emissions of Japanese companies abroad are not counted.

A criticism of precisely specifying these reduction targets is that developed countries shift emissions from domestic sources to emerging and developing countries to meet stated targets for their own emissions reductions. Some researchers therefore recommend establishing a “consumer responsibility” (CR) standard that would measure emissions from the consumer’s point of view, rather than the conventional “producer responsibility” (PR) standard that measures emissions from the consumer’s point of view. view of the producer. (Eder and Narodoslawsky 1999, Ahmad and Wyckoff 2003, Bastianoni et al. 2004, Andrew and Forgie 2008, Peters and Hertwich 2008, Davis and Caldeira 2010). However, a CR standard would not be without problems. According to this standard, exporting companies have limited incentives to reduce emissions in producing countries, since the consumers of their goods are located elsewhere and, for the importer, it is difficult to limit emissions from the production of the business abroad. To address these challenges, a hybrid method combining PR and CR measurements, known as the “shared responsibility” (SR) standard, has been devised to measure emissions from both the producer and consumer perspectives ( Ferng 2003, Bastianoni et al 2004, Gallego and Lenzen 2005, Wiedmann and Lenzen 2006, Lenzen et al 2007, Peters 2008, Cadarso et al 2012, Zhu et al 2018, Piñero et al 2019, Xu et al. 2021). Basically, the SR standard is a weighted average of the PR and CR standards. Therefore, the method used to determine the weighting of CO2 emissions generated by producers and consumers respectively is important. The existing literature offers many different approaches, including setting the weights exogenously (e.g. 50% each) or deriving the weights endogenously.

In our study (Airebule et al. 2021), we derive and analyze the emissions measured by the SR standard of the five most carbon-emitting countries in the world (China, United States, India, Russia and Japan), both in national level and 56 sectoral levels. We start by using the input-output table which has been previously established in the literature. In this specification, the weight of the weighted average is proportional to the value added. We then adopt a new derivation, more realistic, which departs from previous studies and which uses the multi-regional input-output model (MRIO). To do this, we use data from the World Input-Output Database (WIOD) published in 2016 and its environmental account.

We analyze the 2002-2014 emissions using the PR, CR and SR standards of the five countries at the national level (Table 1) and at the sectoral level, giving the following results.

1) In China, India and Russia, the emissions measured by the PR standard exceed those measured by the CR standard, and conversely, in the United States and Japan, the emissions measured by CR exceed the emissions measured by PR (see figure 1 and table 1). This is consistent with international trade patterns, reflected by the ratio of contribution of the three sources (domestic demand, exports and imports) to each country’s SR-measured emissions (see Figure 2).

Figure 1 Producer, consumer and co-responsibility of each economy (CO2 million tons)

Figure 2 Three components of each country’s shared responsibility in 2014

Table 1 The contribution of each economy to global carbon emissions according to different principles

2) Over the study period, emissions in China and India increased by 157% and 116%, respectively, when assessed using SR criteria. (see Figure 1). While in China this growth in emissions is largely driven by overall economic growth, particularly its export growth, it is driven by carbon-intensive production technology in India.

3) The main export destinations contributing to China’s SR-measured emissions in 2014 are the EU, the United States and Japan, while the EU constitutes a large share of the export destinations contributing to SR-measured emissions of Russia. The main import destinations that contribute to the emissions measured by SR in the United States and Japan are the EU, Canada, China and Mexico; and China, EU, USA and South Korea, respectively. This suggests that carbon leakage is occurring in these countries from the United States and Japan.

4) Emissions from the “Supply of electricity, gas, steam and air conditioning” sector are by far the largest of the five countries, representing more than 40% of the emissions measured by SR. The following characteristics are observed in this sector. Production and carbon intensity are high, which contributes to emissions. We also see that the contribution of exports is large in China, while in the United States the contribution of imports is large. India’s carbon intensity is by far the highest of the five countries.

5) The three sectors “Manufacture of basic metals”, “Manufacture of other non-metallic mineral products” and “Manufacture of chemical products” to “Supply of electricity, gas, steam and air conditioning” generate together more than 60% of the emissions measured by SR in the five countries (see table 2).

Table 2 Seven main sectors with the greatest shared responsibility of each country in 2014

It is important to note that existing studies do not include emissions from household consumption due to the nature of the input-output table. This is also the case in our analysis, which excludes emissions related to household consumption. However, the inclusion of household consumption would have little effect on the main conclusions, except in the case of the United States where the share of emissions is relatively high.

Our study raises important questions about how to appropriately assign responsibility for reducing carbon emissions in the future. Our analysis shows that when emissions are measured according to SR standards, both the United States and Japan need to increase their emissions reduction efforts. Establishing and disseminating an RS standard may have additional benefits. One possible effect is greater transfer of emission reduction technology from developed countries to developing countries.

Authors’ note: The research on which this column is based first appeared in a discussion paper by Japan’s Economics, Trade and Industry Research Institute (RIETI).

The references

Ahmad, N and A Wyckoff (2003), “Carbon Dioxide Emissions Embodied in International Merchandise Trade”, Organization for Economic Co-operation and Development.

Airebule, P, H Cheng and J Ishikawa (2021), “Assessing Carbon Emissions Embodied in International Trade Based on Shared Responsibility”, Discussion Paper Series 21-E-099, RIETI.

Andrew, R and V Forgie (2008), ‘A three-perspective view of responsibility for greenhouse gas emissions in New Zealand’, Ecological economy 68(1-2): 194-204.

Bastianoni, S, FM Pulselli and E Tiezzi (2004), “The Problem of Allocation of Responsibility for Greenhouse Gas Emissions”, Ecological economy 49(3): 253-257.

Cadarso, M Á, LA López, N Gómez and M Á Tobarra (2012), “International trade and shared environmental responsibility by sector. An application to the Spanish economy”, Ecological economy 83: 221-235.

Davis, SJ and K Caldeira (2010), “Consumption-Based CO2 Emissions Accounting”, Proceedings of the National Academy of Sciences 107(12): 5687-5692.

Eder, P and M Narodoslawsky (1999), “What environmental pressures are industries in a region responsible for? A method of analysis with descriptive indices and input-output models”, Ecological economy 29(3): 359-374.

Ferng, JJ (2003), “Assigning responsibility for excess CO2 emissions from the perspective of the profit principle and the ecological deficit”, Ecological economy 46(1): 121-141.

Gallego, B and M Lenzen (2005), “A coherent input-output formulation of the shared responsibility of producers and consumers”, Economic Systems Research 17(4): 365-391.

Lenzen, M, J Murray, F Sack and T Wiedmann (2007), “Shared Responsibility of Producers and Consumers — Theory and Practice”, Ecological economy 61(1): 27-42.

Peters, GP (2008), “From production-based national emissions inventories to consumption-based inventories”, Ecological economy 65(1): 13-23.

Peters, GP and EG Hertwich (2006), “Pollution embodied in trade: The Norwegian case”, Global environmental change 16(4): 379-387.

Piñero, P, M Bruckner, H Wieland, E Pongrácz and S Giljum (2019), “The Commodity Basis of Global Value Chains: Allocating Environmental Responsibility on the Basis of Value Generation”, Economic Systems Research 31(2): 206-227.

Wiedmann, T and M Lenzen (2006), “Sharing Responsibility along Supply Chains-A New Life-Cycle Approach and Software Tool for Triple-Bottom-Line Accounting”, paper presented at the Corporate Responsibility Research Conference, Trinity College Dublin, Ireland.

Xu, X, Q Wang, C Ran and M Mu (2021), “Is burden responsibility more efficient? A value-added method for tracking global carbon emissions,” Ecological economy 181:106889.

Zhu, Y, Y Shi, J Wu, L Wu and W Xiong (2018), “Exploring the Characteristics of CO2 Emissions Embodied in International Trade and Equitable Responsibility Sharing”, Ecological economy 146: 574-587.

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