Towards a ‘New Deal’ in Climate Policy!

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Towards a ‘New Deal’ in Climate Policy!

Consumption-based approach for mitigation of GHG Emissions

Dabo Guan, University of Cambridge, UK

Christopher L. Weber, Carnegie Mellon University, Pittsburgh, PA

Glen P. Peters, Center for International Climate and Environmental Research (CICERO), Norway

Jan Minx, Stockholm Environment Institute, York, UK & Berlin, Germany

Klaus Hubacek, University of Leeds, UK

Overview • Consumption-based approach • On different spatial scales

• International (trade) • National (US, China) • Regional (examples from the UK) • Local (housing project in Vienna, Austria)

• Summary

Exemple ocde parts d’un mòbil / altres

Today’s production is based on global supply chains

Der Spiegel, The Global Toothbrush, 01/31/2006 http://www.spiegel.de/international/spiegel/0,1518,398229,00.html

What are consumption-based emissions?

(Carbon Trust, 2006)

Similar to calculating emissions by all factories in a given territory

we could also calculate emissions by all products and services consumed in that territory

(Source: Santacana, 2008)

in the first case, we will know WHERE emissions occur

in the second case, we will know WHY emissions occur

(Santacana, 2008)

From cradle to the grave using Life-Cycle Analysis (LCA)

There are millions of products, each one is different from the other! If we want to calculate emissions from all consumption of a given territory, we will obviously not be able to do that with LCA

(Source: Santacana, 2008)

... •

••••••••••••••••••

• ...

“TOP DOWN” AND “BOTTOM-UP” APPROACH CONSUMPTION EMISSIONS (CARBON FOOTPRINT)

“TOP DOWN”

Input-Output Analysis

Local carbon footprint

Carbon footprint of countries

Carbon footprint of companies and organizations

Carbon footprint of products and activities

Citizen carbon footprint

Regional carbon footprint

“BOTTOM-UP”

LCA

~ ■ ■ ■ ■ ■

■ ■ ■ ■ ■ ■ ■

■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ .

■ ■ ■ ■ ■ ■ ■

■ ■ . ■ -

[Ji ■ . ■ ■ ■ ■

■ ■ ■

~ ■ ■ ■

■ ■ ■ . •

What are direct and indirect emissions of a household?

Indirect GHG emissions (supply chain) Direct GHG emissions

n5 n4 n3 n2 n1

(…) (…)

tC02·eq

(…)

(…)

(…)

(…)

(…) (…)

(…)

Agricultura, Extracci6n y

ganaderfa y Selvicultura Pesca y aglomeraci6n

acuicultura de antracita, caza

hulla Ii ni to TSIO-01 TSIO-02 TSIO-03 TSIO-04

Productos de la agricultura, ganaderfa y

caza TSIO-01 2751 1 2 1 9 4 0

Productos de la selvicultura, de la ex lotaci6n fo restal se rvicios afines TSIO-02 18,4 0, 5 0 0 Pescado y otros productos de la pesca; servicios relacionados con la esca TSIO-03 0 0 0 0

Antracita, hulla, lignito y turba TSIO-04 0, 5 0 0 2 0, 2

Petr6leo crudo ; Gas natural; Servicios relacionados co n la extracci6n de etr6leo TSIO-05 0 0 0 0

CALCULATING CONSUMPTION EMISSIONS

Input-Output Tables show how

• the sectors of an economy are interrelated (in $)

• an economic activity demands, in its production process, inputs from other economic activities

• an increase in final demand of a good or service produces an indirect demand of other goods and services that serve as intermediate inputs to producing that specific good

(Santacana, 2008)

Cat91ory of 1oods and services

Prod ucts of agriculture, hunting and re lated services

Products of fo restry, logging and related serv ices

Fish and other fi shing prod ucts and related serv ices

Anth rac ite, coa l, lignite and peat Cru de petroleum and natural gas; services incidenta l to oil and gas extraction .. Uranium and thorium ores · I ran ores· non-fe rrous metal ores, except uranium and thorium ores

Non-meta Ilic and non-enerav ores

Non-market ed ucation services

Non-market hea lthcare and veterinar/ services; social services

Non-market public sa nitation services

Services. p~ovided by trade unions; services provided by other types of assoc1at1ons

Non-market recreational cultura l and sporting services

Pri vate households with em ployed persons

Financial med iation services indirectly measured (FISIM )

Households

SIOT code

SIOT-01

SIOT-02

SIOT-03

SIOT-04

SIOT-05

SIOT-06

SIOT-07

~ SIOT-65

SIOT-66

SIOT-67

SIOT-68

SIOT-69

SIOT-70

SIOT-71

Production and consumption categories

Calculation of consumption emissions by production activities

Consumption categories (COICOP group)

(…)

Food (COICOP 1, 2)

Clothing and footwear (COICOP 3)

Household energy (COICOP 45)

Housing, furnishings and household goods (COICOP 4, 5)

Health (COICOP 6)

Transport (COICOP 7)

Communication (COICOP 8)

Recreation and culture (COICOP 9)

Education (COICOP 10)

Restaurants and hotels (COICOP 11)Miscellaneous goods and services (COICOP 12)

(Santacana, 2008)

Education

Health

Communications

Clot hi ng/F ootwear

is Goods/Services

Rec/Culture

Utilities

Furnish. Equip, Mai nt

Housing

Private Transport

AlcBev,Tobacco

IF ood/NalcBev

0 .0 2 .0 4.0 6 .0

ton C02efcap-yr

o ,irectco2

c ,02

CH4

N20

HFCs

8.0

What are direct and indirect emissions of a household?

(Weber & Matthews 2008 with newer data)

... ... ... .. .. .. .. .. - - - ... -.. -.. - ... -

UK’s CO2 emissionsC

O2 e

mis

sion

s (M

t CO

2)

CO2 producer emissions (UK Environmental Accounts)

CO2 consumer emissions (UK carbon footprint) 800

750

700

650

600

550

500

CO2 emissions reported to UNFCCC (UK territorial emissions)

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year

Summary - Methods

• Production versus consumption-based accounting approach

• Hybrid models (IO & LCA) • Problems

Next: some applications

International trade

http://xmb.stuffucanuse.com/xmb/viewthread.php?action=attachment &tid=4175&pid=12213

Educadon

Health

Communications

C1olhina/Footwear

Misc Oood&'Scrvicea

Rec/Culture

Udlities/Home Energy

Fumish,Equip,Maint

Hoosing

PrivateTransp:xt

Alc8ev1Tobacco

RestaorantstHotels

Food/Bev at Home

0 500 1000 MTC01

■ Domestic

■ Anni

■ NonAnnl

1500 2000

US household CO2 and location of imports (2004)

(Weber and Matthews 2008)

50% - - - - ■ROW 1.2 ■Ger

I UK 1.0 N I 40% •Korea

0 I u 0.8 •Japan s ■China ...: 0.8 w

30% Mexico w 0.4 ■Canada

0.2 •.Ann1%

0.0 20% 1997 2002 2004

•Services L4

■Transport

1.2 MiscfJlanuf

LO ■ TranspEquip

N ■ Eled:rics/onlcs o 0.8 • MachineEquip 0 ChamPlast a o.,6

■Textiles .. -Ill 0.4 • Metals/Raw w

0.2 ■ Energy

FoodBevTob 0 .. 0

1997 2002 2004

(Weber and Matthews, 2008)Embodied CO2 in imports

Ruaalan Federal

Unilad Kingdom C&nada France

Italy

Korea

Aualralia South Africa

0

-Expons Imports

10 20 30 40 50 Peroentage of total dome■lio amiaaiona (Produc,tion)

Embodied CO2 in exports and imports (2001)

(Peters and Hertwich 2008)

~ 5T,7

54,2

;) \ 41 ,1 '

76,6

16,5

33,6

EU CO2 Trade Balances

Source: Komerup Bang et al. (2008)

Cartogram morphed by total GHG emissions from consumption

__,,,.--- -~ . ~-.,;;

__, -~ -_----- - - . -- . . __ - ~

GHG by GTAP region

tonnes C02e per person

0.73 - 2.11

2.12 - 5.15

- 5.16 - 10.39

- 10.40 - 16.21

- 16.22 - 21 .20

- 21 .21-41 .57

- , ---t·

. ,, --

_..

Source: SEI (2008)

---

20

ne d n y S K n l a l a i aU en n iz aU ia ia d rk ass bip a up a nrr rla u r Ro u BS I UJ R P k T aU a nn ihih CC

Per capita Carbon Footprints

15

10

5

0

(Various sources)

Summary - Trade

• Large inequalities internationally • And within countries • Consumption-based approach favours

developing countries

Next: China

China

Motivation: China’s CO2 Emissions

Chinese CO2 Emissions (IEA Estimate)

0

1000

2000

3000

4000

5000

6000

1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

Mm

t CO

2

US Current Total

emissions 150

100

l N en 50 ~ E : I o I: II

.I: u

-50

-100

19'2 1993 1994 19'5 1996 19'7 19!)8 1999 2000 2001 2002

China: Structural Decomposition Analysis • From 1992 to 2002, 59% increase in CO2

Consumption Volume, 129%

Total, 59%

Consumption Structure, 3% Production Structure, -11%

Emissions efficiency, -62%

contribution of the different final demands to changes

in theSDA 60%

50%

40%

30%

20%

10%

°" -10%

)..

✓•

■ Construction

■ Primary iron and steel manufacturing

~ other special ind ustria I equipment

■ other electronic and communication equipment

■ Electronic computer

■ Motor vehicles and its fittings

Drivers of change (1992-2002)

5000

4500 - Total - Emissions embodied in Chinese exports

4000

3500

3000 N 0 2500 u ...., ~ 2000

1500

1000

500

0

(Weber et al.,2008)China’s exports

33%

21%

100%

80%

N

8 •Non-B .. 60% Rest of e f 8. •Err M ILi

15 40% .EU27

!! .. •us .c VJ!

20%

0%

1987 1989 1991 1993 1995 1997 1999 2001 2003 2005

Figut"e I: Region of' destination :for Chinese CO2 em:ission:s elDhodied in~ by year. EU27 does not inclu.d.e any economies in. 1rall.si.tion {El I), and •rxes• o:f B .. represents all r,pqgining Anne-.: B COIID.t:ries which do not :fall in.to anotll.er aroup.

Destinations of China’s exports

(Weber et al. 2008)

1750

1500 ■ Transpor1/Serv Ices ■ Mlsc Manufacture

■ Eled:ronlc:s

1250 ■ Maohlnery/Equlp Metal Proo ucts

■ Raw Metals N 1000 Wood/Mlneral Proo 0

0 Cheml0als/Plasttc:s

~ 750 ■ Textiles

■ Ag+Mlnlng

500

250

Chinese export emissions by commodity group

(Weber et al. 2008)

China - Summary

• Significant difference between urban and rural lifestyles and emissions

• Efficiency gains are not sufficient

• Almost a 1/3 of emissions for export production

UK

DM',ographks

• Household demographia Population movement

~e::'round & beliefs

e Occupation e 1ndustry • EmJjoyrrentstatus • Qua lifications • Sodo-economicstatus

Car;andtransport Product and media

e Directonhips Shareholdings Bad debt Credit behaviour

Property Characurlstlcs

Housing age Se.condresidendes Amenities Tenure Building .......,,. __

• Council tax band Property value Prop?rtysa1es -e A.t.cessibi lity

• Rurality Urbanisation Islands

MOSAIC: Using Geo-demographic Marketing Data

• Experian: world leading supplier of consumer segmentation

• MOSAIC UK: consumer classification

• Comprehensive post-code specific information on property, residents and their lifestyle

• 61 lifestyle groups • over 400 variables

www.sei.se/reap

16:ICIEI ---------------------------------------.

-...

1UJCIEI

1:!l:ICIEI

~ 1IZICIEI 1:1 --... -1- BIZIIZI if E: IJ

I! lilZIIZI ~

._IZIIZI

:!IZIIZI

~ .::: R! & 'Iii I l'iill iii & lt:I'"' Iii Cl:ltn;&

F~llhill' t t-al . 11:1 = H 1:111111:::111::1

::::.....: El:!• j:111 I! 1t

.. 9! 11111:::::1!!1

- .._......::::i b I B:11Cilb:::11 ~ffl 11 l:iilml Cl+---------T"------..---------.-------.------------------1

Cl :!IZIIZI UIIII 11111:1 DIICI 1CIEIIZI 1:!l:ICIEI

Hl:LI 1t11::i1i:::1 lj:lll"dn; P,, 11111:::!n E: ~

UK Final demand decompostion

(Minx, 2008)

CO2 by Local Authority tonnes of CO2 per household

17.10 - 20.40

1111 20.40 - 21 .50

1111 21 .50 - 22 .50

1111 22.50 - 24.10

1111 24.1 0 - 29.40

Average weekly household total income pounds stirling

420 - 500

1111 soo-sso

Ill sso - 600

Ill 600 - 700

1111 700 - 1040

(www.sei.se/reap)

Legend

Total Housing Footprint lonne!I per capita

31'/''4 - )U.9'

- 353'9-l7•0C

- 37"40S·31)31

- 313,31-Jffll

- 31922 - • 7629

Legend

Total Transport Footprint tonnes per capita

1791S - 25'5)

- 25-45.- - 27008

- H009 ° 2Cll3'il

- 2Clll5 - 323a2

- )234) - !7371

Legend

Total Food Footprint tonnes per capita

09821 - 0Vfle

- 092i7 - 0t72•

- 09725 - 1004$

- 10Ck6 - t0ll2

- 1 038) - 12629

Specific carbon footprints

Housing Travel Food

(www.sei.se/reap)

Public Transport Carbon Footprint (by OA) tonnes per capita

0.64 - 0.83

- 0.83-0.89

- 0.89-1 .01

- 1.01- 1.19

- 1.19- 1.83

Case Study

Car-Free City: Vienna, Austria

(Ornetzeder et al. 2007)

Location in Vienna (Wien)

IIID

D

~

~

D

• D

CO2 emissions kg

CO2

emis

sion

s pe

r cap

ita

8 000

7 000

6 000

5 000

4 000

3 000

2 000

1 000

-

0.33 kg/€

0.49 kg/€

0.40 kg/€

Car free Reference Average Austrian

Other

Hotel+Restaurant

Food

Car + moped

HolidayTransp

Publ.Transport

Energy

areas of c onsum pti on Energy (heating warm water, electricity)

Public transport Holiday transport (mainly airtravel) C ar, motorbike, etc. Food Hotel and restaurant

Other total

Car-free Reference project settlement

in kg C Oi per capita 489 620 88 62

1,336 1,119 57 817

292 163 212 128

1,730 1,615 4,202 4,524

Emissions

Approach allows linking the global and the local

(www.sei.se/reap)

Conclusions • Holistic approach

– Territorial, Production and Consumption

– Territorial explains where

– Consumption explains why

• Combination of top-down and bottom up

• Analyses at different scales: global, national and local

Conclusions cont…

• Scientific challenges – Uncertainty, data, methods,

definitions, … – Can be overcome with time

• Policy and Regulatory Challenges

– Actors operate outside of their “territory”

Conclusions cont… Currently, we see a separation between a country’s consumption and the global production system

Rich countries tend to have: – Stabilized production-based emissions – Increased consumption-based emissions

Brings into question decoupling of economy and emissions

Conclusions cont…

•“Shadow Consumption based Indicator” alongside official accounting

•Effective policy on sustainable consumption and production

•Increase transparency and equity in climate change policy

Klaus Hubacek k.hubacek@leeds.ac.uk

+ Glen Peters, Chris Weber, Dabo Guan, Jan Minx

Selected References • CP/RAC (Regional Activity Centre for Cleaner Production (2008). A Consumption-

based Approach to Greenhouse Gas Emissions in a Global Economy: A Pilot Experiment in the Mediterranean. Case Study: Spain. Barcelona.

• Dabo Guan, Glen P. Peters, Christopher L. Weber , Klaus Hubacek (2009). “Journeyto world top emitter – an analysis of the driving forces of China’s recent CO2 emissions surge.” Geophysical Research Letters. 36, L04709.

• Guan, Dabo, Peters, Glen, Christopher L. Weber, and Klaus Hubacek (2008) “The Drivers of Chinese CO2 Emissions from 1980 to 2030”; Global Environmental Change. Vol. 18. 626–634.

• Ornetzeder, M., Hertwich, E, Hubacek K., Korytarova, K., Haas, W. (2008). “The Environmental Effect of Car-free Housing: A Case in Vienna.” Ecological Economics Vol. 65/3, 516-530.

• Peters, Glen, Christopher L. Weber, Dabo Guan, Klaus Hubacek (2007) “China’s growing CO2 emissions - a race between lifestyle changes and efficiency gains”.Environmental Science and Technology 41, pp.5939-5944.

• Peter, Glen P. And Edgar G. Hertwich (2008). CO2 Embodied in International Trad with Implications for Global Climate Policy. Environmental Science & Technology,Vol. 42/5, 1401-1407.

• Weber Christopher L. and Scott H. Matthews (2008). Quantifying the global and distributional aspects of American household carbon footprint. Ecological Economics, 6 6, 3 7 9 – 3 9 1

Additional slides

Carbon Footprint for US Households

Communications

Clothing/Footwear

Misc Goods/Servi

Utilities/Home Energy

Fumish11Equip,Mai nt

Housing

Private Transport

Restaurants.Hotels

0 500 1000

• Expenditure

■ CO2

1500 2000

MT CO2 and $lo' HH Expenditure

Carbon Footprint for US Households (2004)

Source: Weber & Matthews (2008)

11 u

aJth

11-i, [Iii ~ 0 car

...... ICI El

=: [fl

e _ta rant. , H

urni a m1nt.

Cl

0 20 ,000 000 0000 00-0 0 ,r

Carbon Footprint and Income

(Weber & Matthews, 2008)

6

2

0

) 5 ,n11111QP!n . Id I z

7'

a H uing

a

H ·alth

AtcB ·

n

l thing/ "'ootw ar

Re. auram,~.H

■ .. u1'1rti h Equip int

Prival ran ·pon

C ood

Carbon Footprint and Household Size

(Weber & Matthews, 2008)

US - Summary

• Households vary considerably in their CO2 responsibilities

• Household income and expenditure being the best predictors

• 30% of total US household CO2 was produced outside the US

llndex (2008 = 1)

11

10

9

8

7

5

4

3

2

Carbon productivity =

.. ■ ..

GDP

Emissions

...... llil _. !!ii

. ,. ,._ .,. • ·• -· "'

Carbon productivity growth required 5.16 percent per annum

World GDP growth at current trends* 3. 1 percent per annum (r,eal)

1 Emissions decrease to o - - - - - - - - reach 20 GtCO ~ by 2050

-2.4 peroent per annum 2005 2010 2015 2 020 2(125 2(130 2(135 204(1 2045 2050

How to reach 20 GTCO2e by 2050

Source: McKinsey Analysis

Index Y1ear O = 1

10 I '

I

6

4

2

0

Carbon prod u ctivlty / 1groW'lh naqu in~d J··

2008- 50 /

/ /

/ ,

. I. I

I I

US labor product iv1ty 1g rO\l\flh 1830- 1955

0 10 20 30 40 .50 60 70 80 '90 100 110 120 1:30

Years

A ‘Carbon revolution’ needs to be 10 times faster than the industrial revolution rise in labour productivity

Source: Contours of the world economy 1-2030 A.D. Madison, 2007. McKinsey Analysis.

Per-capita annual ernissior1s, 2005 TCO ... e ..

United States

Russia

EU-27

China

India

World sustainable average•

·• En1is.sion budger· for a day {alternatives')

21.5 Travel

stay home

Shop

Eat

20-40 km car ride

10-20 hours air conditioning

2 new T-shirts (6 kg of CO2•

so don't drive to the shop)

2 meals a day (6 kg CO2)

of 300 g meat, 200 g fries, tap water

Live at 20 GTCO2e per year

Source: McKinsey Analysis

Contribution to UK Meat Footprint 0 .1

10

1,000 1 ooot CO2 per year

Forest Change hectares per year

- -3500000 to -1 0000

- -10000 to -100

-100to0

No Change or No Data

Oto 100

100 to 10000

- 10000 to 110000

, .. "ft

Carbon emissions from meat consumption

(www.sei.se/reap)

Hong Kong

United Kingdom

Germany

Japan

United States

Brazil

South Africa

Rest of Former Soviet Union

Rest of Middle East

Russian Federation

China

-800 -600 -400 -200

Mt CO2-eq (2001)

0

□ Carbon dioxide (CO2)

■ Methane (CH4)

□ Nitrous Oxide (N2O)

□ Fluorinated Gases

200 400 600 800 1000

Global Balance

Source: Peters (2008)

IPCC definition: “national (including administered) territories and offshore areas over which the country has jurisdiction”

Production-based inventories are based on the economic activities of residential institutions as defined in the System of National Accounts (including international economic activities primarily, international transportation and tourism—as defined in GDP

Consumption-based emission inventory as the total global emissions occurring from economic consumption within a country

Approaches

• case-control study of the ‘car-free’ settlement

• combination of the quantitative and qualitative social research designs

• with input-output analysis, • LCA, • questionnaires, and • qualitative interviews.

l [t] NOx [kg] COD [kg] A01 [~ Toxic Energy Expenditure waste [kg] [G J] [k€]

C ar-fr ee 4.2 14 10 15 61 75 12.7

Reference 4.5 13 9 13 54 80 11.2

Average 7.0 16 11 16 72 101 14.3

Emissions

types of transport C ar -fr e e pr oj e ct Ref er enc e settlement

by car households with 0 km in 2 0 03 59 .5% 27.3% total ( all households) in 2 0 0 3 (km) (42 hh) 23)78 ( 4 6 hh) 5 0 5 ~ 0 1 8 by car- sharing 8)78 4,240 average distance per household in 20 0 3 (km) 566 10 ~9 7 9

by train total ( all households) in 2 0 0 3 (km) 77 ~6 0 0 5)00 average distance per household in 2 0 0 3 (km) 1~848 124

by airplane

share of households without flights in 2 0 0 3 42.9% 52 .2% total ( all households) in 2 0 0 3 (km) 291 ~800 286~900 aver age distance per household in 2 00 3 (km) 6~948 6,237

total distance by car~ train~ airplane per household (km) 9)62 17 )40

Mobility

20

CO2 emissionsCO

2 w

ithou

t air

tran

spor

t [t]

16

12

8

4

0

y = 0.4R2 =

54x0.8209

y = 2.3192x0.4386

R2 = 0.4531

0.9279

/

/

• X

y = 0.3466x0.

R2 = 0.9631

8856

Car-free Ref no car Ref car A Avg P(Ref car) P(Car-free) P(Ref no car)

0 10 20 30 40 50 60 70 80

Income [k€]

Fuel consumption in 1000 Megajoules per capita

(Runge 2005 after Newmann & Kenworthy 1989)

US Cities

Australien Cities

Central European Cities

Population density (cap per hectares)

-----------------

:counts Producer Emissions 400

200

150

100

50

1992

■ EEi OECD Europe EEi OECD non-Europe EEi ROW

1993

C 0 Cl) Cl)

E Q)

N 0 u

1994 1995 1996 1997 1998 1999

650

600

2000 2001 2002 2003 2004

ons (embedded emissions indicator)

d (incl. overseas territories)

500 -+---------,-----r-------,-----,----------r----,----------c------r--,--------.---r--------r-----.-------------,

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Wiedmann et al. (2008) United Kingdom

600.0

400.0

200.0

0.0

1981 1983 1987 :t 1995 1997 2000 2002 -200.0

-400.0

-600.0

Figure 1: The orange line shows the percentage change in Celi emismons from 1981 to

2002. Other colored lines represent the conbibution to change from GDP per capita growth (light blue, 469%),. efficiency gains (re4. -425%),. population (dark blue,. 72%),. production structure ~ 45%), and consumption patterns (pmple, 42%). The inconsistent efficiency gains (red line) between 2000 and 2002 are due to the under­

reporting coal consumption at the end of 1990s (6, 20).

The Drivers of CO2 Emissions – 1981-2002

Structural Decomposition Analysis (1981-02)

(Guan, et al. 2009)

♦ ♦

R2 = 0.8969

-

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

50.00

Car

bon

Foot

prin

t (C

O2e

t/hh)

0 100 200 300 400 500 600 700 800 900 1000

Weekly household income (£)

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