For four different years (1997, 2001, 2004 and 2007) they gathered together data on emissions and trade for 71 regions of the world, and converted the data into equivalent carbon dioxide emission units. Immediately they could see an across-the-board increase in carbon being traded, both as fossil fuels and embodied into products, as a result of international trade. In 1997 their data showed that the combined international trade in carbon (as fossil fuels and embodied in products) was 12.3 GtCO2 (55% of global emissions), but by 2007 this had risen to 17.6 GtCO2 (60% of global emissions).
"Basically we are seeing globalization in action," Andrew told environmentalresearchweb. "With more goods traded, and goods produced in developing countries that have less-developed energy and environmental regulation, it clearly follows that there will be more emissions embodied in international trade."
Within these figures the researchers could see that the trade in fossil fuels was larger (10.8 GtCO2 in 2007) than the trade in embodied carbon products (6.9 GtCO2 in 2007), but that the product trade was growing faster (4.6% per year compared to 3.1% per year for the fossil fuel trade).
So where is most of this trade occurring? "Eight of the top 10 flows between regions in our model involve China," said Andrew. The results clearly show that China is both a supplier – extracting and selling fossil fuels and products with embodied emissions – and a purchaser, through other countries selling fuels and products to China. "China is not only the world's factory, but its own consumption is also increasing rapidly," he added.
This "grey" market in carbon is now vast, and will completely undermine efforts to reduce carbon emissions if no action is taken. But what is the best way to tackle the problem? Emissions could be regulated by taxing imported goods or reducing the consumption of foreign goods. "Both of these options are tricky given international trade rules, which try to prevent discrimination against other countries' production," said Andrew, whose findings are published in Environmental Research Letters (ERL). A third option would be to stop consuming so much, but this might threaten economic growth. Some tough decisions lie ahead.
- Climate policy and dependence on traded carbon Robbie M Andrew, Steven J Davis and Glen P Peters 2013 Environ. Res. Lett. 8 034011
- Robbie Andrew, Center for International Climate and Environmental Research in Oslo (CICERO)