Climate change policy and the reduction of greenhouse gas emissions are currently discussed at all scales, ranging from the Kyoto Protocol to the increasingly frequent advertisement of ‘carbon neutrality’ in consumer products. However, the only policy option usually considered is thereduction in direct emissions in several forms. Another potential policy tool, currently neglected, is the reduction of indirect emissions, i.e. the emissions embodied in goods and services, or the payments thereof.
In this book we report the mathematical technique for computing the total carbon emissions embodied in goods and services and the payments thereof, and derive an indicator of carbon responsibility which is applied to countries (or other economic agents).
We emphasize the possibility of abating both upstream and downstream embodied emissions as a means to achieve reductions in direct carbon emissions.
We use the Global Trade Analysis Project (GTAP) 6 database (87 world regions, 57 sectors per region, base year 2001) to build a global multiregional input–output (MRIO) model and compute the embodied emissions of economic sectors and the carbon responsibility of regions.
Among other results, we observe that with regard to economic and environmental performance, countries can be grouped in world regions. For Developed economies, Africa and Latin America, carbon responsibility is higher than direct emissions, whereas for Fossil Fuel Exporters, Asia and Eastern Europe, the opposite is true. When considering individual countries, greater variability is found, and especially for small open economies carbon responsibility can deviate substantially from direct emissions.