How production-based and consumption-based emissions accounting systems change climate policy analysis: the case of CO2 convergence

  • Etem Karakaya
  • Burcu Yılmaz
  • Sedat AlataşEmail author
Research Article


Much of the existing research analyses on emissions and climate policy are dominantly based on emissions data provided by production-based accounting (PBA) system. However, PBA provides an incomplete picture of driving forces behind these emission changes and impact of global trade on emissions, simply by neglecting the environmental impacts of consumption. To remedy this problem, several studies propose to consider national emissions calculated by consumption-based accounting (CBA) systems in greenhouse gas (GHG) assessments for progress and comparisons among the countries. In this article, we question the relevance of PBA’s dominance. To this end, we, firstly, try to assess and compare PBA with CBA adopted in greenhouse gas emissions accounting systems in climate change debates on several issues and to discuss the policy implications of the choice of approach. Secondly, we investigate the convergence patterns in production-based and consumption-based emissions in 35 Annex B countries for the period between 1990 and 2015. This study, for the first time, puts all these arguments together and discusses possible outcomes of convergence analysis by employing both the production- and consumption-based CO2 per capita emissions data. The empirical results found some important conclusions which challenge most of the existing CO2 convergence studies.


Consumption-based accounting CO2 convergence Climate policy CO2 and trade Annex B countries 


Supplementary material

11356_2019_5007_MOESM1_ESM.rar (13 kb)
ESM 1 (RAR 12.8 kb)


  1. Acar S, Söderholm P, Brännlund R (2018) Convergence of per capita carbon dioxide emissions: implications and meta-analysis. Clim Pol 18(4):512–525CrossRefGoogle Scholar
  2. Afionis S, Sakai M, Scott K, Barrett J, Gouldson A (2017) Consumption-based carbon accounting: does it have a future? WIREs Climate Change 8:e438. CrossRefGoogle Scholar
  3. Aldy JE (2006) Per capita carbon dioxide emissions: convergence or divergence? Environ Resour Econ 33(4):533–555CrossRefGoogle Scholar
  4. Aldy JE (2007) Divergence in state-level per capita carbon dioxide emissions. Land Econ 83(3):353–369CrossRefGoogle Scholar
  5. Amador OF, Francois JF, Oberdabernig DA, Tomberger P (2017) Carbon dioxide emissions and economic growth: an assessment based on production and consumption emission inventories. Ecol Econ 135:269–279CrossRefGoogle Scholar
  6. Aşıcı AA, Acar S (2016) Does income growth relocate ecological footprint? Ecol Indic 61(Part 2):707–714Google Scholar
  7. Barassi MR, Cole MA, Elliott RJ (2011) The stochastic convergence of CO2 emissions: a long memory approach. Environ Resour Econ 49(3):367–385CrossRefGoogle Scholar
  8. Barassi MR, Spagnolo N, Zhao Y (2017) Fractional integration versus structural change: testing the convergence of CO2 emissions. Environ Resour Econ 71:923–968. CrossRefGoogle Scholar
  9. Bilgili F, Ulucak R (2018) Is there deterministic, stochastic, and/or club convergence in ecological footprint indicator among G20 countries? Environ Sci Pollut Res 25(35):35404–35419CrossRefGoogle Scholar
  10. Boitier B (2012) CO2 emissions production-based accounting vs. consumption: insights from the WIOD databases. In WIOD Conference Paper, AprilGoogle Scholar
  11. Brannlund R, Lundgren T, Soderholm P (2015) Convergence of carbon dioxide performance across Swedish industrial sectors: an environmental index approach. Energy Econ 51:227–235CrossRefGoogle Scholar
  12. Brizga J, Feng K, Hubacek K (2017) Household carbon footprints in the Baltic States: a global multi-regional input–output analysis from 1995 to 2011. Appl Energy 189:780–788CrossRefGoogle Scholar
  13. Brock WA, Taylor MS (2003) The kindergarten rule of sustainable growth. NBER Working Paper Series, 9597Google Scholar
  14. Chen B, Yang Q, Li JS, Chen GQ (2017) Decoupling analysis on energy consumption, embodied GHG emissions and economic growth: the case study of Macao. Renew Sust Energ Rev 67:662–672CrossRefGoogle Scholar
  15. Cole MA (2004) Trade, the pollution haven hypothesis and the environmental Kuznets curve: examining the linkages. Ecol Econ 48(1):71–81CrossRefGoogle Scholar
  16. Copeland BR, Taylor MS (2013) Trade and the environment: theory and evidence. Princeton University PressGoogle Scholar
  17. Criado CO, Grether JM (2010) Convergence in per capita CO2 emissions: a robust distributional approach. CEPE Working Paper No 70,
  18. Davis SJ, Caldeira K (2010) Consumption-based accounting of CO2 emissions. PNAS 107(12):5687–5692CrossRefGoogle Scholar
  19. Dobson, S. and Fellows, G.K. (2017). Big and little feet: a comparison of provincial level consumption- and production-based emissions footprints. University of Calgary, The School of Public Policy Research Paper, 10:23Google Scholar
  20. Fan JL, Hou YB, Wang Q, Wang C, Wei YM (2016) Exploring the characteristics of production-based and consumption-based carbon emissions of major economies: a multiple-dimension comparison. Appl Energy 184:790–799CrossRefGoogle Scholar
  21. Grasso M (2016) The political feasibility of consumption-based carbon accounting. New Political Economy 21(4):401–413CrossRefGoogle Scholar
  22. Grasso M (2017) Achieving the Paris goals: consumption-based carbon accounting. Geoforum 79:93–96CrossRefGoogle Scholar
  23. Hao Y, Liao H, Wei YM (2015) Is China’s carbon reduction target allocation reasonable? An analysis based on carbon intensity convergence. Appl Energy 142:229–239CrossRefGoogle Scholar
  24. Hubacek K (2016) Consumption-based accounting of U.S. CO2 emissions from 1990 to 2010. IDE Discussion Paper No. 593, JETROGoogle Scholar
  25. IEA (2017) World Energy Outlook. IEA Publications, International Energy Agency, ParisGoogle Scholar
  26. Karakaya E, Alataş S, Yılmaz B (2017) Replication of Strazicich and List (2003): are CO2 emission levels converging among industrial countries?. Energy EconGoogle Scholar
  27. Kearsley A, Riddel M (2010) A further inquiry into the pollution haven hypothesis and the environmental Kuznets curve. Ecol Econ 69(4):905–919CrossRefGoogle Scholar
  28. Kıran Baygın B (2017) Stochastic convergence of per capita greenhouse gas emissions among G7 countries: an evidence from structural breaks. Istanbul University Econometrics and Statistics e-Journal 26:60–70Google Scholar
  29. Liddle B (2018) Consumption-based accounting and the trade-carbon emissions nexus. Energy Econ 69:71–78CrossRefGoogle Scholar
  30. Liu L, Wu T, Huang Y (2015) An equity-based framework for defining national responsibilities in global climate change mitigation. Climate and Development 9(2):152–163CrossRefGoogle Scholar
  31. Mankiw NG, Romer D, Weil DN (1992) A contribution to the empirics of economic growth. Q J Econ 107(2):407–437CrossRefGoogle Scholar
  32. Martino R, Nguyen-Van P (2016) Environmental Kuznets curve and environmental convergence: a unified empirical framework for CO2 emissions. Working Papers of the Bureau d'Economie Théorique et Appliquée, 18, UDS, StrasbourgGoogle Scholar
  33. Mir G, Storm S (2016) Carbon emissions and economic growth: production-based versus consumption-based evidence on decoupling.. Institute for new Economic Thinking working paper series no. 41., Available at SSRN:
  34. OECD (2011) Towards green growth: monitoring progress-OECD indicators. Sixth Meeting of the UN Committee of Experts on Environmental-Economic Accounting New York, 15–17 June 2011, ESA/STAT/AC.238 UNCEEA/6/11Google Scholar
  35. Panopoulou E, Pantelidis T (2009) Club convergence in carbon dioxide emissions. Environ Resour Econ 44(1):47–70CrossRefGoogle Scholar
  36. Peters GP, Hertwich GH (2008) CO2 embodied in international trade with implications for global climate policy. Environ Sci Technol 42(5):1401–1407. CrossRefGoogle Scholar
  37. Peters G, Andrew RM, Karstensen J (2016) Global environmental footprints: a guide to estimating, interpreting and using consumption-based accounts of resource use and environmental impacts. Nordic Council of Ministers.
  38. Pettersson F, Maddison D, Acar S, Söderholm P (2014) Convergence of carbon dioxide emissions: a review of the literature. Int Rev Environ Resour Econ 7(2):141–178CrossRefGoogle Scholar
  39. Sala-i-Martin XX (1996) The classical approach to convergence analysis. Econ J 106(437):1019–1036CrossRefGoogle Scholar
  40. Sato M (2012) Embodied carbon in trade: a survey of the empirical literature. Centre for Climate Change Economics and Policy, Working Paper No.77, Grantham Research Institute on Climate Change and the EnvironmentGoogle Scholar
  41. Scott KA (2016) Integrating embodied emissions into climate change mitigation policy. Unpublished PhD Thesis, The University of Leeds Sustainability Research Institute School of Earth and Environment, 2016Google Scholar
  42. Scott K, Barrett J (2015) An integration of net imported emissions into climate change targets. Environ Sci Pol 52:150–157CrossRefGoogle Scholar
  43. Scott K, Daly H, Barrett J, Strachan N (2016) National climate policy implications of mitigating embodied energy system emissions. Clim Chang 136:325–338. CrossRefGoogle Scholar
  44. SEI (2017) Consumption-based accounting reveals global redistribution of carbon emissions. Stockholm Environment Institute Discussion Brief,
  45. Solarin SA (2019) Convergence in CO2 emissions, carbon footprint and ecological footprint: evidence from OECD countries. Environ Sci Pollut Res, 1–15Google Scholar
  46. Steininger K, Lininger C, Droege S, Roser D, Tomlinson L, Meyer L (2014) Justice and cost effectiveness of consumption-based versus production-based approaches in the case of unilateral climate policies. Glob Environ Chang 24:75–87CrossRefGoogle Scholar
  47. Stern DI (2017) The environmental Kuznets curve after 25 years. J Bioecon 19:7–28CrossRefGoogle Scholar
  48. Strazicich MC, List JA (2003) Are CO2 emission levels converging among industrial countries? Environ Resour Econ 24:263–271CrossRefGoogle Scholar
  49. The Global Carbon Atlas Database (2018)
  50. Tukker A, Dietzenbacher E (2013) Global multiregional input-output frameworks: an introduction and outlook. Econ Syst Res 25:1–19CrossRefGoogle Scholar
  51. Ulucak R, Apergis N (2018) Does convergence really matter for the environment? An application based on club convergence and on the ecological footprint concept for the EU countries. Environ Sci Pol 80:21–27CrossRefGoogle Scholar
  52. Wang H, Zhang Y, Lu X, Nielsen CP, Bi J (2015) Understanding China’s carbon dioxide emissions from both production and consumption perspectives. Renew Sust Energ Rev 52:189–200CrossRefGoogle Scholar
  53. Wiebe K, Yamano N (2016) Estimating CO2 emissions embodied in final demand and trade using the OECD ICIO 2015, OECD science, technology and industy working papers, 2016/05, OECD Publishing, ParisGoogle Scholar
  54. World Bank (2017) World development indicators (Washington, D.C.)Google Scholar
  55. Yavuz NC, Yilanci V (2013) Convergence in per capita carbon dioxide emissions among G7 countries: a TAR panel unit root approach. Environ Resour Econ 54:283–291CrossRefGoogle Scholar
  56. Zhang Z, Zhu K, Hewings GJD (2017) A multi-regional input–output analysis of the pollution haven hypothesis from the perspective of global production fragmentation. Energy Econ 64:13–23CrossRefGoogle Scholar
  57. Zhou P, Wang M (2016) Carbon dioxide emissions allocation: a review. Ecol Econ 125:47–59CrossRefGoogle Scholar

Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2019

Authors and Affiliations

  1. 1.AydınTurkey
  2. 2.Department of Economics, Faculty of Economic and Administrative SciencesAdnan Menderes UniversityAydınTurkey

Personalised recommendations