A critical examination of the consumption‐based accounting approach: has the blaming of consumers gone too far?

Abstract

A series of studies has recently used emissions embodied in net imports (EENI) to argue for the consumption-based accounting (CBA) approach. These publications have been generating much attention from the media and academia for 'providing an opportunity to inform effective climate policy'. However, policymakers must be cautious when considering if CBA can be used to replace or just to supplement current practice of production-based accounting (PBA). Terms such as 'carbon leakage', 'emissions transfers', and 'CO 2 outsourcing' have been uncritically overused as there is little evidence that EENI is the result of climate policy. Furthermore, CBA overlooks 'insourcing' of polluting industries by producing regions when blaming consumers for emissions. To avoid misinformation, EENI should be called just that. CBA's practicality is limited as it involves more data-intensive calculations and higher transaction costs than PBA. The success of CBA will rely on consumers to put pressure on producers. Eventually, it is still producers that need to reduce emissions. PBA is more practical by directly placing pressure on producers along with environmental laws and regulations. CBA will be counter-productive to global emissions control if producers increase emissions due to reduced responsibility over the emissions incurred by the production of their exports. However, CBA could be used to persuade consumers to choose low-emissions products, support producers' sustainability efforts, and reduce nonbasic consumption.

Producer cities and consumer cities: Using production- and consumption-based carbon accounts to guide climate action in China, the UK, and the US

“…This process can also operate within nations, and indeed may be more important at the intra-national level if urban areas lead climate action. In China the wealthiest urban areas and regions have taken the largest efforts to reduce emissions (Liu, 2015), and Wang et al (2015) found some evidence for weak leakage at a regional level.…”

“…The prospect for the wider adoption of consumption-based emissions accounting approaches is sometimes perceived to be limited (Liu, 2015;Jakob et al, 2014). Calculating consumptionbased accounts can be technically complex.…”

Consumption‐based carbon accounting: does it have a future?

“…However, the occurrence of strong leakage is contested and more empirical data are required before safe conclusions can be drawn. Currently, the literature suggests that the drivers of traded carbon are too diverse to be solely attributed to off‐shoring due to stringent environmental standards or cleaner production patterns in developed countries …”

“…However, these will not pave the way for a decoupling of economic growth and environmental deterioration unless rapid consumption growth is urgently addressed. As Liu notes, a drop in emissions by 50% due to cleaner technologies would be negated by a doubling of production/consumption. As Isenhour and Feng (Ref , p. 7) argue, a valid point to be made is whether attempts by developed countries to address their consumption emissions through promoting the transfer of technologies into developing countries ‘simply rationalizes accelerated consumption and a globalized rebound effect.’ Consequently, as Barrett et al .…”

“…A smaller but growing body of literature has taken a more political perspective on CB accounting, advocating or opposing its adoption as the UNFCCC's accounting principle. While several studies have argued that the adoption of a CB accounting approach would carry benefits for international climate change policy, others have taken a more skeptical stance, doubting its effectiveness and political feasibility, as well as its overall applicability in a real‐world setting due to methodological complexities . This study aims to review this debate and outline the reasons why CB accounting has gained stature in international discussions on climate mitigation on the one hand, but has struggled to secure adequate political support on the other.…”