Consumption-based approaches to climate mitigation: data collection, measurement methods and model analysis

Directorate General Climate Action of the European Commission (DG CLIMA) commissioned Ricardo-AEA Ltd (Ricardo-AEA) and Gesellschaft für Wirtschaftliche Strukturforschung (GWS) to develop and investigate the use of consumption-based emissions accounting methodologies for policy assessment. Global warming impacts (in kg or tonnes of CO2eq) are measured on a territorial basis. A complementary approach is to assign emissions to goods, so that the emissions travel with them as they are traded globally. The emissions are then allocated to the country in which the goods are consumed. Consumption-based emissions can be estimated in two distinctly different ways. A life-cycle assessment (LCA) reveals the environmental impacts of a product at each stage of its life-cycle (bottom-up). In contrast, a top-down assessment starts with a Multi-Regional Input-Output (MRIO) model, in this case GWS’s Global Resources Accounting Model, GRAM. In terms of which technique is better for quantifying consumption-based emissions, we found that the answer is policy-specific. Approaches are rather complementary. The MRIO approach allows for allocating territorial emissions to final consumption at an aggregated industry level. Principal Policy Conclusions: Some of the increasing consumption in the EU was satisfied by production located in non-EU regions. The rise of the "emerging economies" producing for satisfying the new EU demand therefore explains why "consumption based" approaches estimate an increase in the emissions related to EU consumption. Overall, and most importantly, global mitigation action is the key to reduce consumption-based emissions.

Wiebe, K. S., Lutz, C. & Gandy, S. (2016): Policies and Consumption-Based Carbon Emissions from a Top-Down and a Bottom-Up Perspective,