1. Empowered lives.
Resilient nations.
Carbon consumption: Which
footprint to measure?
Ben Slay
Senior economist
UNDP Bureau for Europe and CIS
15 September 2011

2. Why this presentation?
1990
• During 1990-2008, global
30.3
greenhouse gas (carbon)
2008
emissions grew 39%
21.9
• Development dimension:
– Most of this growth comes
from developing countries
– Developed (and transition)
economies made relatively
small contribution
• How should these trends
be interpreted?
Billion tons of CO2 equivalent.
UNFCCC data.

3. Kyoto Protocol divides
countries into three groups
• Annex I (“industrialized economies and
economies in transition”):
– Must reduce greenhouse gases to 1990 levels
• Annex II (“industrialized countries”) must:
– Reduce greenhouse gases to 1990 levels
– Subsidize efforts by Annex I, non-Annex I
countries to mitigate, adapt to climate change
• Non-Annex I: Developing countries (China,
India, Brazil)—No obligations

4. National obligations under
the Kyoto Protocol
Annex I countries Non-Annex I countries
• Belarus • Lithuania • Albania • Georgia
• Bulgaria • Poland • Armenia • Kyrgyzstan
• Czech Rep. • Romania • Azerbaijan • Malta
• Croatia • Russia • Bosnia and • Moldova
• Hungary • Slovakia Herzegovina • Montenegro
• Kazakhstan • Turkey • Cyprus • Serbia
• Latvia • Ukraine • Former • Tajikistan
Yugoslav • Turkmenistan
Republic of
Macedonia • Uzbekistan

5. Changes in country shares of global
greenhouse gas emissions
23% 1990 2008
22%
Annex I, II:
19% 19% Obliged to reduce Non-Annex I: Not
emissions obliged to reduce
emissions
13%
11% 11% 11%
5% 5% 6% 6%
4%
3%
USA EU-27 Russia Japan China India Other DCs
UNFCCC data.

6. Varying interpretations
• “Developing countries need binding targets”
• Developed countries are “outsourcing” or “off-
shoring” carbon-intensive production to
developing countries
– “Massive transfer of carbon from the poor world
to the rich world”
• Rich world is exploiting a loophole in the Kyoto system
– Implication: Carbon consumption should be
measured, not production (emissions)

7. “Carbon consumption”: Key questions
• What is it?
• How to measure it?
• What would be the development implications
of measuring carbon consumption (as
greenhouse gas indicator, under Kyoto
Protocol) for:
– Developing, developed countries?
– Transition economies?

8. How to measure
carbon consumption?
• Answer:
– Measure “virtual carbon trade”—greenhouse
gases embodied in imports and exports
– Carbon consumption = Emissions – net carbon
exports
• This gives us the ability to show the share of
China’s greenhouse gas emissions that are:
– Generated in China . . .
– . . . But are due to production of goods that are
consumed in other countries

9. Recent developments
• New study* (May 2011) measures carbon
consumption for:
– 1990-2008 period
– 95 countries
– 24 RBEC countries
• Not included:
– BiH, FYRoM, Kosovo (as per UNSC resolution
1244), Montenegro, Serbia
– Moldova, Tajikistan, Turkmenistan, Uzbekistan
* Peters et al., “Growth in emission transfers via international trade from 1990 to
2008”, Proceedings of the National Academy of Sciences, 2011, available at
http://www.pnas.org/content/108/21/8903.full.pdf+html.

10. Carbon production, consumption:
Important country differences
5741
Greenhouse 6213 Greenhouse
5048 gases gases
emitted consumed
4880
3993
4170
1505 1403
1288 1486
1265 1168
USA China EU Russia India Japan USA EU China Japan India Russia
In million tons of CO2 equivalent, annual averages (2000-2008).

11. Who are the world’s
largest carbon exporters?
878
Four of the top 12 are
transition economies
337
138 118
72 47 44 39 32 32 29 27
In million tons of CO2 equivalent, annual averages (2000-2008).

12. Who are the world’s
largest carbon importers?
-57 -48 -28 -26
-71 -64
-82
-199
-472
-886
In million tons of CO2 equivalent, annual averages (2000-2008).

13. What if we measured carbon
consumption, not emissions?
• Carbon exporters would have lower emissions
reductions requirements
– A smaller share of the global mitigation burden
would fall on them
• Carbon importers would have higher
emissions reductions requirements
– A larger share of the global mitigation burden
would fall on them
• Who are the net carbon importers, exporters?

14. Net carbon exporters
(in relative terms)
23% 22%
Net greenhouse gas exports divided by
greenhouse gas emissions (million tons of CO2
equivalent, annual averages for 2000-2008)
16%
13% 12%
6%
5%
3%
0%
Russia Ukraine Kazakhstan Poland Czech Rep. Azerbaijan Bulgaria Romania Belarus

15. Net carbon importers
(in relative terms)
-10% -10%
-17%
-20%
-26% -23%
-34% -31%
-39%
-53% -51%
Net greenhouse gas imports divided by
greenhouse gas emissions (million tons of CO2
equivalent, annual averages for 2000-2008)
-92%
-107%

16. “Outsourcing” as an explanation for
carbon exports/imports
878
• China’s position as the
world’s largest carbon
exporter is due to migration
of carbon-intensive
China EU
manufacturing from EU
• EU’s position as the world’s
largest carbon importer is
due to migration of
-886
carbon-intensive
In million tons of CO2 equivalent, manufacturing to China
annual averages (2000-2008).

17. Can “outsourcing” explain carbon
exports in CIS countries?
• Probably not:
– Not much manufacturing has migrated to these
countries from developed world
– Post-Soviet “de-industrialization”
• Better explanation: carbon-intensive industrial
sectors, reflecting:
– Large roles of energy, metals in industry, exports
– Energy (in)efficiency

18. Many net carbon exporters are
also very energy inefficient . . .
4.1
Tons of CO2 equivalent
3.5
consumed per $ of GDP,
3.1 annual averages, 2000-2008
2.0 1.9
1.3
1.1 1.0
Ukraine Kazakhstan Azerbaijan Russia Bulgaria Romania Poland Czech Rep.

19. . . . While carbon importers tend
to be more energy efficient
2.1
Tons of CO2 equivalent
consumed per $ of GDP,
annual averages, 2000-2008
1.3 1.2
1.1
1.0 1.0 0.9 0.9
0.8 0.8 0.7 0.7
0.6

20. Development implications
• Use of carbon consumption data to set
binding emissions reductions would:
– Favour energy inefficient countries (carbon
exporters)
– Burden energy efficient countries (carbon
importers)
• Carbon “out-sourcing”—a red herring?
– In RBEC region there’s not much evidence of this
– By imposing binding emissions constraints on
developed but not developing countries, Kyoto
promotes “carbon outsourcing”

21. Conclusions
• Basic indicator for measuring national
contributions to climate change to remain
greenhouse gas production
– Difficulties in measuring “virtual carbon trade”
– Negotiators don’t want to re-open this issue
• Development implications:
– For transition economies, this may not be a bad thing
– But let’s keep an eye on this “other carbon footprint”
• Rather than argue about “outsourcing” carbon
emissions, let’s reduce them