Global drivers of change in GHG emissions from a consumption perspective. Carbon footprint accounting in a post-Paris world

The Conference of Parties (COP 21) held in Paris in 2016 re-iterated the scientific evidence that global temperature increase must not exceed 2 degrees Celsius by 2050, and that therefore international and national climate policies need to aim towards partial- or even full decarbonisation of energy systems, industries and sectors. In order to allow decarbonisation to happen efficiently and fast traditional policies based on accounting GHG emissions from a production perspective ought to be supplemented with a consumption-based approach. This outcome sends a clear signal to the LCA community that carbon footprint studies have relevance and potentially strong impacts on climate policy-makers who try to formulate the right carbon policies in an interwoven, globalized economy. However, to formulate good consumption-based policies along international supply chains and for governments to implement them successfully requires first and foremost an analysis of the driving forces of carbon footprint growth. Often it is postulated that efficiency improvements are not significant enough to reach mitigation targets when analysing the impacts of a rapidly developing world. In order to inform policy derivation on tackling the drivers of changes in emissions, it is then necessary to isolate the impacts along the supply chain of aspects such as technology change, efficiency improvements, changing consumer habits, rising levels of affluence, and population growth. Further, the electricity sector bears the highest potential to reduce carbon emissions globally, with studies showing that a full decarbonisation of the electricity sector is possible if the right policies are set to place that allow initiation of fuel-switch and change to non-fossil fuel based technologies (Mercure and Knobloch, 2016). The question then arises what factors specifically act on the carbon footprint related to fossil fuel combustion emissions and do they differ from those driving the footprint of non-fossil fuel combustion emissions? Understanding the global relationship between forces on the consumption side acting on the producer of goods and services, who themselves rely on energy inputs with various fuel mixes, is key to sustainable mitigation policy that covers the entire supply chain. In order to understand driving forces of GHG emissions from a consumption perspective we perform a structural decomposition analysis of a MRIO database with the average of the polar decomposition (De Haan, 2001; Dietzenbacher and Los, 1998) technique every two years from 1995 – 2009 (pair-wise) to see the evolution of the contribution of the different components to footprint growth. In our study, we looked at changes in efficiency; the changes due to trade related effects (both for intermediate producers and final consumers); the changes due to technology effects (both for intermediate producers and final consumers); and the change due to affluence and population. Different dynamics act on the footprint growth over time and in different regions. Greenhouse gas emissions and energy consumption are mainly driven by the increase of consumption per capita in developing economies, such as China, and in the European Union. This growth in affluence reduces (or even reverts) gains in carbon and energy efficiency. When looking at regional shifts in greenhouse gas emissions footprints over time, the displacement of industries from developed economies and the increase in imports to final demand contributes to emissions growth, mainly from combustion. This work implies that a) efficiency effects have been historically most successful, and should be continued where possible until limits are reached; b) policy must tackle the strong growth of affluence effects if it is going to reduce emissions, as the large growth in consumption per capita counteracts gains in efficiency. Changes in consumption patterns, that is, changes in the mix of products consumed, haven’t shown a significant effect in the changes of energy or GHG footprints so far. While trade could allocate production to more efficient countries to reduce resource use and pollution, historically the effect of trade has been to increase energy and combustion GHG footprints in developed economies.JRC.B.5-Circular Economy and Industrial Leadershi