OECDCO2emissionsembodiedinconsumption
Whatareconsumption‐basedcarbonemissions?
Reliable carbon emissions statistics are essential for formulating responses to climate change and to
inform global negotiations such as those concluded in Kyoto in 1997 or recently in Paris at COP21.
Typically, emissions statistics are compiled according to production‐based or territorial emission
accounting methods: measuring emissions occurring within sovereign borders. However, these
estimatesdonotreflectproductionchainswhichextendacrossborders.Emissionsassociatedwiththe
productionofagivengoodandorservicemayariseinmanycountries.Thesubstitutionofdomesticfor
foreignsuppliersofintermediateinputsmayresultinareductionofanation’semissions,buttheeffect
on global emissions will depend on whether the foreign suppliers use less ("cleaner") or more
("dirtier") carbon‐intensive energy and other inputs. To account for the origins of CO2 emissions
embodiedinfinaldemand,theOECDhasdevelopedconsumption‐based,ordemand‐based,estimatesof
carbon emissions. These provide a useful complement to the traditional production‐based emission
estimates.Figure1illustratesthedifferencebetweenconsumption‐andproduction‐basedemissions.
Figure1:Theoriginsofemissionsintheproductionofawoodentable(forillustrativepurposes)
AwoodentableisboughtbyaconsumerinFrance.ItwastransportedbyaGermanlogisticscompany
fromPoland,whereitwasassembledfromscrewsproducedinChinaandwoodenplanksproducedin
Lithuania. China provided the tools to cut the timber from Finland into wooden planks. The screws
were manufactured in China from metal, produced in the UK using Australian iron ore and German
machinery.CO2isemittedateachstepalongtheproductionchain:transportthroughPoland,Germany
and France, assembly (using electricity) in Poland, cutting the timber (using diesel generators) in
Finland, etc. The blue clouds indicate where CO2 is emitted along the production chain. These are
production‐based or territorial emissions. Demand‐/consumption‐based emissions are exactly the
same,butinthiscasetheyareallocatedtothecountryofthefinaluseofthewoodentable,i.e.France.
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OECDCO2emissionsembodiedinconsumption
http://oe.cd/io‐co2
The terms consumption‐based emissions and demand‐based emissions can be used interchangeably
and include emissions embodied in final consumption (households and government) as well as gross
fixedcapitalformation(investment),changesininventoriesanddirectpurchasesabroadbyresidents.
Thecalculationofproduction‐basedandterritorialemissionsdiffersaccordingtotheallocationofnon‐
residentemissions.Forexample,forterritorialemissions,theemissionsassociatedwithfuel‐purchases
bynon‐residentsareallocatedtothecountrywherethefuelispurchased,whileforproduction‐based
emissionsthesameemissionsareallocatedtothecountryofresidenceoftheemittingsource.
The evolution of production‐based and consumption‐based carbon emissions over recent years is
highlighted in Figure 2. While the OECD countries in total have been, and still are, net importers of
embodied carbon (the solid blue line representing consumption‐based emissions is above the dashed
blue line representing production‐based emissions), non‐OECD countries are net‐exporters. Note that
byconstruction,theshadedblue(OECDnetimports)andgreen(non‐OECDnetexports)areashavethe
exactsamesize,i.e.OECDnet‐importsareequaltonon‐OECDnet‐exportsofembodiedcarbon.
Gt CO2
Figure2:
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16
14
12
10
8
6
4
2
0
CO2emissionsfromfuelcombustion(OECDandnon‐OECDcountries)
Net‐imports of embodied CO2 into OECD countries
Consumption‐based (OECD)
Net‐exports of embodied CO2 of non‐OECD countries
Production‐based (OECD)
Production‐based (non‐OECD)
Consumption‐based (non‐OECD)
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18
16
14
12
10
8
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0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
However,therearedifferencesattheleveloftheindividualcountry,withsomeOECDcountriesbeingnet
exporters, and some non‐OECD countries being net importers. Figure 3 shows per capita production‐
andconsumption‐basedemissionsforallOECDandG20countries.Thecountriesareorderedaccording
toconsumption‐basedemissionsin2011.Iftheredbarrepresentingconsumption‐basedemissionsis
tallerthanthebluebarrepresentingproduction‐basedemissions,thecountryisanet‐importerofCO2
emissions.ThisrevealsthattheNetherlandsandKoreaare,forexample,net‐exporterofemissionsand
Brazil is a net‐importer of emissions. However, the difference in per capita emissions between OECD
andnon‐OECDcountriesremainslarge.
Figure3:
PercapitaCO2emissionsfromfuelcombustion
Consumption‐based 2011
20
Consumption‐based 1995
15
Production‐based* 1995
10
5
0
AUS
USA
CAN
LUX
SAU
BEL
CHE
FIN
NOR
AUT
OECD
ISR
KOR
JPN
EST
DEU
CZE
IRL
NLD
GBR
GRC
SVN
DNK
NZL
ITA
SWE
FRA
RUS
POL
SVK
ISL
ESP
ZAF
HUN
PRT
CHN
TUR
CHL
ARG
MEX
BRA
IDN
IND
tonnes CO2 per capita
Production‐based* 2011
* Production‐based estimates after reallocation of emissions from non‐resident expenditures on fuel
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OECDCO2emissionsembodiedinconsumption
http://oe.cd/io‐co2
Resultsatcountryandindustrylevel
Figure4displaystheoriginofemissionsembodiedinGermany’sdemandformotorvehiclesbysource
industry(verticalaxis)andsourcecountry(horizontalaxis):identifying“CO2hotspots”
The coloured rectangles represent those industries which have the highest share of emissions
embodied in the motor vehicles bought by final consumers in Germany: chemicals, non‐metallic
minerals,basicmetals,motorvehiclesandelectricity,gasandwatersupply.Encircledinpinkarethose
countries mainly responsible for the CO2 emissions embodied in Germany’s final demand for motor
vehicles: Czech Republic, Poland, United States, China, India and Russia. The data set also allows
analysis across other dimensions e.g. the final demand industries and countries using CO2 emitted by
Australia’sbasicmetalsindustry,foranyyearbetween1995and2011.
Such measures are valuable complements to production‐based emissions accounting in policy
discussions.Ontheonehand,understandingtheoriginsofCO2, emittedalongglobalproductionchains,
tomeetacountry’sfinaldemandcanprovideinsightsregardingboththeeffectivenessofnationaland
regional(e.g.EUETS)policyinitiativesfordecreasingCO2emissions.Ontheotherhand,suchmeasures
alsoprovidevaluableinformationtofacilitateinternationalcooperationinmitigationefforts.
Figure4:
Germany’sdemandformotorvehicles–originofemissionsbycountry
andindustry–2011hotspots
DataandMethodology
TheoriginsofemissionsembodiedinfinaldemandcanbeestimatedusingOECD’sInter‐CountryInput‐
Output(ICIO)systemusingasimilarmethodologytothatusedforestimatingtheoriginsofvalueadded
embodied in final demand for the Trade in Value Added (TiVA) Database. The OECD has been
developingandregularlyupdatingestimatesofconsumption‐basedCO2emissionssincethemid‐1990s
(WyckoffandRoop,1994;AhmadandWyckoff,2003;Nakanoetal.,2009;OECD,2011;GGKP;2013).
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OECDCO2emissionsembodiedinconsumption
http://oe.cd/io‐co2
The mathematical notation builds on input‐output
theory.BandyarepartoftheOECDICIOtablesand
are used to calculate the TiVA indicators as well.
Instead of multiplying the matrices with value
added to output ratios, to calculate embodied
emissions, the matrices are multiplied by emission
factors(ef):thatisCO2emissionsinkt(orMt,some
physical unit) per unit of industry output. These
emissions factors are different for all industries in
allcountries.TheyareestimatedbycombiningIEA
CO2emissionsfromfuelcombustionstatisticsanddata
fromtheICIO.Inaddition,weneedtoconsiderdirectemissionsoffinaldemand,i.e.residentialemissions
(e.g.domesticuseofgasoven/stove/waterboiler)andemissionsfromprivateroadtransport.
ThematrixCChasthesamedimensionsastheglobal
finaldemandmatrixandneedstobereadasfollows:
EncircledingreenisdomesticallyemittedCO2which
is also embodied in domestic consumption and the
directemissionsfromfinaldemand.Encircledinlight
blueisCO2emitteddomestically,butwhichisembodied
infinaldemandofothercountries.Thus,itisembodied
inexports.Addingdomesticallyproducedandconsumed
and domestically produced and exported emissions
givesproduction‐basedemissions:encircledindark
blue.EncircledinyellowisCO2emittedabroad,but
embodied in domestic final demand. Adding domestically produced and consumed and CO2 emitted
abroadembodiedindomesticfinaldemandgivesconsumption‐basedemissions:encircledinred.
Linkstodata
OECDembodiedCO2emissions
OECDInter‐CountryInputOutputtables
OECDTradeinValueAddedindicators
IEACO2EmissionsfromFuelCombustion
http://oe.cd/io‐co2
http://oe.cd/icio
http://oe.cd/tiva
http://www.iea.org/statistics/topics/co2emissions/
Contact
Sendanemailtostan.contact@oecd.orgmentioningEmbodiedCO2inthetitleofyourmessage.
Literature
Ahmad,N.andA.Wyckoff(2003),"CarbonDioxideEmissionsEmbodiedinInternationalTradeofGoods",OECDScience,Technology
andIndustryWorkingPapers,No.2003/15,OECDPublishing,Paris,http://dx.doi.org/10.1787/421482436815.
GGKP(2013)MovingtowardsaCommonApproachonGreenGrowthIndicators.AGreenGrowthKnowledgePlatformScoping
Paper.April2013.GlobalGreenGrowthInstitute(GGGI),OrganisationforEconomicCo‐operationandDevelopment
(OECD),UnitedNationsEnvironmentProgramme(UNEP),andWorldBank.
NakanoS,A.Okamura,N.Sakurai,M.Suzuki,Y.TojoandN.Yamano(2009),“TheMeasurementofCO2EmbodimentsinInternational
TradeEvidencefromtheHarmonisedInput‐OutputandBilateralTradeDatabase”,OECDScience,TechnologyandIndustry
WorkingPapers,No.2009/03,OECDPublishing,Paris,http://dx.doi.org/10.1787/227026518048.
OECD(2011),TowardsGreenGrowth:MonitoringProgress:OECDIndicators,OECDGreenGrowthStudies,OECDPublishing,
Paris,http://dx.doi.org/10.1787/9789264111356‐en.
Wyckoff,A.andJ.Roop(1994),TheEmbodimentofCarboninImportsofManufacturedProducts,EnergyPolicy22(3),187‐194.
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Paris,February2016