Net trade in fossil-fuel emissions for selected regions, showing both fossil-fuel trade and embodied emissions

<p><strong>Figure 2.</strong> Net trade in fossil-fuel emissions for selected regions, showing both fossil-fuel trade and embodied emissions. A positive balance against the vertical axis indicates more fossil fuels exported for combustion elsewhere than imported. A positive balance on the horizontal axis indicates more domestic fossil fuels embodied in products exported for consumption elsewhere than foreign fossil fuels embodied in products imported. Note that the horizontal and vertical axes have different scales and the concentric circles are only for illustrative purposes.</p> <p><strong>Abstract</strong></p> <p>A growing number of countries regulate carbon dioxide (CO₂) emissions occurring within their borders, but due to rapid growth in international trade, the products consumed in many of the same countries increasingly rely on coal, oil and gas extracted and burned in other countries where CO₂ is not regulated. As a consequence, existing national and regional climate policies may be growing less effective every year. Furthermore, countries that are dependent on imported products or fossil fuels are more exposed to energy and climate policies in other countries. We show that the combined international trade in carbon (as fossil fuels and also embodied in products) increased from 12.3 GtCO₂ (55% of global emissions) in 1997 to 17.6 GtCO₂ (60%) in 2007 (growing at 3.7% yr⁻¹). Within this, trade in fossil fuels was larger (10.8 GtCO₂ in 2007) than trade in embodied carbon (6.9 GtCO₂), but the latter grew faster (4.6% yr⁻¹ compared with 3.1% yr⁻¹ for fuels). Most major economies demonstrate increased dependence on traded carbon, either as exports or as imports. Because energy is increasingly embodied in internationally traded products, both as fossil fuels and as products, energy and climate policies in other countries may weaken domestic climate policy via carbon leakage and mask energy security issues.