The aim of Carbon-CAP was to stimulate an effective climate policy mix, in the EU and internationally, to address emissions related to consumption in addition to those related to production. The project looked into the role of international trade, examined consumption-based accounting methodologies and explored what policies options might be available to reduce emissions from consumption.

Key findings

Global drivers of change in carbon emissions

Trade is an important driver for global greenhouse gas emissions, but not as important as growth in affluence and overall industry efficiency. This was only true, however, when looking at global emissions growth. When taking into account regional shifts in greenhouse gases over time, the displacement of industries from developed economies in the European Union and the OECD and the increase in imports contributed to emissions growth, mainly from combustion. This is because the displacement took place to countries that in the period had a carbon intensive energy infrastructure, such as China. For non-combustion emissions, changes in trade patterns seemed to decrease greenhouse gas emissions footprints.

Accounting emissions related to consumption

There are a variety of databases, tools, methods and models to evaluate aspects of consumption based carbon emissions. For assessing the past and the present, which are both necessary to understand trends, environmentally extended Input-Output analysis, possibly hybridized with Life Cycle Assessment, seemed to be the best approach.

Policy options

Carbon-CAP identified promising demand-side strategies and policy instruments that can complement production based policies. Each of these was assessed against criteria of effectiveness (how much carbon reduction is achieved in a given product or service if applied successfully), scope (how much of the global flow of carbon is then affected), economic equity (how are the costs distributed within society) and political, legal and institutional acceptance.

The modelling showed various consumption-based policies that have considerable potential to reduce CO₂ emissions in Europe, especially with regard to buildings (4-7%) and transport (4-14%). For food, direct emission reduction of e.g. limiting food waste could be significant, but the cheaper food basked then causes a rebound effect that annihilates this reduction. Overall, however, these areas of consumption based options and policies contributed in a limited way to the already planned production-oriented emission reductions. The net emission transfers between the rest of the world and Europe would stay stable or slightly reduce, but as a percentage of total (reduced) emissions would grow.

The project also found that a significant proportion of embodied carbon from imports is unavoidable because it arises from foreign mining operations and domestic alternative materials do not exist. In relation, the consumption-based emission reduction measures used in this study had small impact on trade related emissions and therefore more attention should be paid to designing and assessing policies that address them. Policies addressing rebounds effects are highly relevant too.

There was agreement amongst businesses consulted at the end of the project that this is an important conversation and there is interest in discussing how to select policies for reducing consumption based emissions. Collaboration initiatives between government, business and consumers would be necessary to identify, develop and implement the most effective options. Guidelines and criteria that governments should consider when engaging with business on new policy approaches might also be useful.

More research will still be needed to iron out remaining uncertainties in the use of consumption-based accounting systems and developing whole-economy models capable of analysing and forecasting consumption-side emissions. However, this should not preclude the possibility of the EU to start recognising and quantifying consumption-based emissions and trade-embodied carbon and to step up efforts to identify and implement new consumption policies.

The final report about the Carbon-CAP project is available here.