Abstract
In the context of the post-Kyoto policy debate, the question was raised whether the current practice of production-based emissions accounting should be replaced by a consumption-based approach. In this paper, we qualify the conditions under which the way of carbon accounting makes a difference, and show how this affects the incentive of countries to opt for one or the other alternative. Two main insights are presented: First, it is emphasized—and formally shown with a general equilibrium trade model—that the way of accounting has neither efficiency nor distributive effects in the presence of a global cap-and-trade regime with full coverage and given national emission caps. Second, the accounting scheme does matter whenever the initial allocation rule for emission rights is related to past emissions. However, for a net exporter of carbon such as China, the preference for one or the other turns out to be ambiguous, since the current production-based accounting would be favored under grandfathering, whereas consumed carbon would be the preferred measure whenever higher current or historic emissions imply a lower initial allowance, as e.g. under the principle of historical responsibility.
References
Baer P, Harte J, Haya B, Herzog AV, Holdren J, Hultman NE, Kammen DM, Norgaard RB, Raymond L (2000) Equity and greenhouse gas responsibility. Science 289:2287
Bastianoni S, Pulselli FM, Tiezzi E (2004) The problem of assigning responsibility for greenhouse gas emissions. Ecol Econ 49:253–257
Bodansky D (2004) International climate efforts beyond 2012: a survey of approaches. Pew Center on Global Climate Change, USA
Dröge S, van Asselt H, Brewer T, Grubb M, Ismer R, Kameyama Y, Mehling M, Monjon S, Neuhoff K, Quirion P, Schumacher K, Mohr L, Suwala W, Takamura Y, Voituriez T, Wang X (2009) Tackling Leakage in a world of unequal carbon prices. Climate Strategies, Cambridge. http://climatestrategies.org/our-reports/category/32/153.html. Accessed 14 December 2009
Guan D, Peters GP, Weber CL, Hubacek K (2009) Journey to world top emitter: an analysis of the driving forces of China’s recent CO2 emissions surge. Geophys Res Lett 36:L04709. doi:10.1029/2008GL036540
Lin B, Sun C (2010) Evaluating carbon dioxide emissions in international trade of China. Energy Policy 38:613–621
Liu X, Wang C (2009) Quantitative analysis of CO2 embodiment in international trade: an overview of emerging literatures. Front Environ Sci Eng China 3(1):12–19. doi:10.1007/s11783-009-0011-x
Munksgaard J, Pedersen KA (2001) CO2 accounts for open economies: producer or consumer responsibility. Energy Policy 29:327–334
Pan J, Phillips J, Chen Y (2008) China’s balance of emissions embodied in trade: approaches to measurement and allocating international responsibility. Oxf Rev Econ Policy 24:354–376
Peters GP, Hertwich EG (2008a) CO2 embodied in international trade with implications for global climate policy. Environ Sci Technol 42:1401–1407
Peters GP, Hertwich EG (2008b) Post-Kyoto greenhouse gas inventories: production versus consumption. Clim Change 86:51–66
Richels R, Blanford G, Rutherford T (2009) International climate policy: a “second best” solution for a “second best” world? Clim Change Lett 97(1):289–296
Salanie B (2002) The economics of taxation. The MIT Press, Cambridge
Stern N (2009) The global deal: climate change and the creation of a new era of progress and prosperity. Public Affairs
Wang T, Watson J (2008) China’s carbon emissions and international trade: implications for post-2012 policy. Clim Policy 8:577–587
WBGU (2009) Solving the climate dilemma: the budget approach. Special Report. German Advisory Council on Global Change. WBGU, Berlin
Weber CL, Peters GP, Guan D, Hubacek K (2008) The contribution of Chinese exports to climate change. Energy Policy 36:3572–3577
Yang Y, Yang L (2010) China’s foreign trade and climate change: a case study of CO2 emissions. Energy Policy 38:350–356
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Steckel, J.C., Kalkuhl, M. & Marschinski, R. Should carbon-exporting countries strive for consumption-based accounting in a global cap-and-trade regime?. Climatic Change 100, 779–786 (2010). https://doi.org/10.1007/s10584-010-9825-6
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10584-010-9825-6