The Carbon Trust Policy & Markets team set out
to understand the role international carbon flows play in national
accounts of greenhouse gas emissions.
The International Carbon Flows analysis presented here explores
the magnitude and impact of the movement of embodied carbon around
the world, at a global scale and for five selected sectors. By
tracking this flow of emissions from the region of production to
the region of consumption, this analysis provides new insights into
the drivers of GHG emissions production, and the opportunities for
reduction, in the globally integrated flow of carbon embodied in
products.
Around one quarter of greenhouse gas emissions are embodied
in goods and services which "flow" between the country of
production and the country of consumption via international trade.
Over the next decade, reducing the carbon intensity of traded goods
will be a key focus of business and policy action, and an important
opportunity to further reduce GHG emissions.
Key findings
- Embodied carbon flows are large and growing
Approximately 25% of all
CO2 emissions from human activities 'flow'
(i.e. are imported or exported) from one country to
another.
- Embodied carbon flows in both commodities and final
products
The flow of carbon is comprised of roughly 50% emissions
associated with trade in commodities such as steel, cement, and
chemicals, and 50% in semi-finished/finished products such as motor
vehicles, clothing or industrial machinery and equipment.
- Embodied carbon imports are significant for many developed
economies
Major developed economies are typically net importers of
embodied carbon emissions. UK consumption emissions are 34%
higher than production emissions: Germany (29%), Japan (19%)
and the USA (13%) are also significant net importers of embodied
emissions. For some economies with very carbon efficient production
processes, the relative importance of imported carbon is even
greater. The high levels of net imports in France (43%) and Sweden
(61%) reflect in part the low carbon intensity of their energy
systems.
- Many developing countries export embodied emissions in
international trade
Developing countries are generally net exporters of
CO2 emissions. For example, in 2004
China exported ~23% of all its domestically produced
CO2
Implications for business
Businesses are primarily responsible for importing and exporting
traded goods on behalf of their customers. The carbon embodied in
supply chains is both an opportunity and a risk:
- Business opportunities from international carbon flows
The opportunity is to measure and reduce emissions across the
supply chain and communicate this to consumers, in order to be
rewarded for action through increased sales and reduced costs.
- Business risks from international carbon flows
The risk in failing to take action is that consumers choose lower
carbon alternatives and that ultimately new emissions abatement
approaches force businesses to take action at a later date in any
event.
Download the results of the research: