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Climatic Change (2009) 97:379388 DOI 10.

1007/s10584-009-9606-2

Trade, transport, and sinks extend the carbon dioxide responsibility of countries: An editorial essay
Glen P. Peters Gregg Marland Edgar G. Hertwich Laura Saikku Aapo Rautiainen Pekka E. Kauppi

Received: 8 August 2008 / Accepted: 17 April 2009 / Published online: 24 June 2009 Springer Science + Business Media B.V. 2009

Abstract Globalization and the dynamics of ecosystem sinks need be considered in post-Kyoto climate negotiations as they increasingly affect the carbon dioxide concentration in the atmosphere. Currently, the allocation of responsibility for greenhouse gas mitigation is based on territorial emissions from fossil-fuel combustion, process emissions and some land-use emissions. However, at least three additional factors can signicantly alter a countrys impact on climate from carbon dioxide emissions. First, international trade causes a separation of consumption from production, reducing domestic pollution at the expense of foreign producers, or vice versa. Second, international transportation emissions are not allocated to countries for the purpose of mitigation. Third, forest growth absorbs carbon dioxide and can contribute to both carbon sequestration and climate change protection. Here we quantify how these three factors change the carbon dioxide emissions allocated to China, Japan, Russia, USA, and European Union member countries. We show that international trade can change the carbon dioxide currently allocated

G. P. Peters (B ) Center for International Climate and Environmental Research-Oslo (CICERO), 0318 Oslo, Norway e-mail: glen.peters@cicero.uio.no G. Marland Environmental Sciences Division, Oak Ridge National Laboratory, Oak Ridge, TN 37831-6335, USA G. Marland International Institute for Applied Systems Analysis (IIASA), 2361 Laxenburg, Austria G. P. Peters E. G. Hertwich Industrial Ecology Programme, Norwegian University of Science and Technology, 7491 Trondheim, Norway L. Saikku A. Rautiainen P. E. Kauppi Department of Biological and Environmental Sciences, University of Helsinki, Helsinki, 00014 Finland

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to countries by up to 60% and that forest expansion can turn some countries into net carbon sinks. These factors are expected to become more dominant as fossilfuel combustion and process emissions are mitigated and as international trade and forest sinks continue to grow. Emission inventories currently in wide-spread use help to understand the global carbon cycle, but for long-term climate change mitigation a deeper understanding of the interaction between the carbon cycle and society is needed. Restructuring international trade and investment ows to meet environmental objectives, together with the inclusion of forest sinks, are crucial issues that need consideration in the design of future climate policies. And even these additional issues do not capture the full impact of changes in the carbon cycle on the global climate system.

Four factors describe the impact of a country on the stock of carbon dioxide in the atmosphere, but most national inventories of greenhouse gas emissions include only one, or at most two, of these factors. These four factors are domestic emissions from fossil-fuel combustion and industrial processes (Marland et al. 2007), emissions from the production of goods and services for international trade (here referred to as embodied emissions, Peters and Hertwich 2008a), extraterritorial emissions from international transport (Kim et al. 2007; Peters and Hertwich 2008b; UNCTAD 2008) and varying degrees of the net sources or sinks of carbon in ecosystems (Achard et al. 2002; Schlamadinger et al. 2007). Here, we assess these factors based on recent data published for China, Japan, Russia, the USA, and European Union (EU) member countries. We observe large variations among countries and a general trend that the dominance of domestic fossil-fuel emissions is decreasing relative to the other factors in dening national CO2 responsibility. Inventories of CO2 emissions from fossil-fuel combustion (and industrial processes such as cement production) were originally compiled to improve the understanding of the global carbon cycle and the increase in atmospheric CO2 . Inventories of carbon ows between the atmosphere and the biosphere and between the atmosphere and the oceans are still compiled in an effort to better understand the physical and biological processes and the bio-geochemical cycling of carbon (Canadell et al. 2007b). For these purposes we need to know where and when carbon dioxide emissions occur. To allocate responsibility to countries, and consequently to focus our efforts and monitor our progress in limiting emissions, we need to know more about carbon dioxide emissions. For greenhouse gas mitigation it is necessary to know where and when these carbon ows occur, but this information is not sufcient for optimal mitigation policies. We need to know how and why human actions affect CO2 emissionsregardless of where and when the emissions occur. We need to know, for example, how heating a room, buying a television, ying an airplane, eating a steak, or planting a tree affect CO2 emissions and removals. Our current territorial-based emission inventories quantify the location and magnitude of emissions from a coalred power station, for example, but they do not reveal who is using the generated electricity and for what purpose. Some of the electricity may be used to heat a nearby home, but some may be used to manufacture automobile components that

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will be exported to distant and politically disconnected producers or consumers. For climate mitigation we need to understand the interaction between the global carbon cycle and society and this requires knowledge of how and why emissions occur. We need to understand how life-styles and consumption patterns (Jackson 2005) affect trade, transport, and ecosystems across national borders (Ciais et al. 2007; Peters and Hertwich 2008a). The territorial inventories used as the basis of international agreements to limit emissions do not reveal the total emissions of CO2 attributable to the citizens of a given country and therefore are not efcient at limiting global emissions. The distinction between a countrys consumption and its production-based territorial emissions is becoming more and more evident. Since the drafting of the Kyoto Protocol in 1997, some developed countries that ratied the treaty have reported reductions in their CO2 emissions. Yet global emissions of fossil-fuel CO2 rose by about one third from 1990 to 2006, with the growth rate increasing after the year 2000 (Raupach et al. 2007). The contribution of emissions from developing countries is commonly perceived to have increased substantially. A component of the growth in developing country emissions, however, stems directly from consumption in developed countries. Globally, in 2001, an estimated 5.3 gigatons (Gt) (22% of global CO2 emissions) of embodied CO2 emissions were shifted around the globe due to international trade, with a general trend that developed countries were net importers of CO2 emissions (Peters and Hertwich 2008a). Taking into account net trade, the European Union imported 0.6 Gt of embodied CO2 more than it exported (13% of domestic emissions) and the USA had a net import of 0.4 Gt CO2 (7%). In contrast, China had a net export of 0.6 Gt CO2 (18%) and Russia had a net export of 0.3 Gt CO2 (22%). Demand for international trade and travelboth for business and for tourism increases international transport. Some countries act as transportation hubs and as a consequence sell large quantities of bunker fuels to foreign ships and planes for the purpose of international transportation. The International Maritime Organization estimates that in 2007 0.841.12 Gt CO2 were emitted from world shipping (3.1 4.1% of world fuel consumption, UNCTAD 2008) and the US Federal Aviation Administration estimates that 275 Mt CO2 were from international aviation (1% of global fossil-fuel emissions, Kim et al. 2007). Allocating responsibility for the emissions from international transportation has proved challenging due to the complex structure of the industry, particularly for shipping. In the Netherlands, for example, the estimated emissions from bunker fuel sales were 66 Mt CO2 in 2006 (56 Mt from ships, 10 Mt from planes). Yet, Dutch operated ships only emitted 4 Mt CO2 , while Dutch operated planes emitted 13 Mt. Complicating matters further Dutch ships may operate, for example, between Hong Kong and the US and can purchase fuel anywhere along the route, while delivering goods for multiple producers and consumers. Attributing emissions from international transportation to countries is difcult and controversial. Consequently, emissions from international transportation are currently not allocated to any country and escape quantiable mitigation. A fair, transparent, and agreed-upon method to allocate emissions to countries needs development. The carbon stocks in ecosystems respond to agricultural and forestry management. The change of the stocks in ecosystems is signicant in many countries, some losing others gaining carbon. Recently, the sequestration of carbon in tree biomass

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was estimated country-by-country in the EU27 (Saikku et al. 2008) as well as in sixteen European countries (Ciais et al. 2008). Between 1990 and 2005, the expansion of above-ground tree vegetation annually removed an amount of carbon from the atmosphere equal to 8% to 11% of EU emissions (Ciais et al. 2008; Saikku et al. 2008). This compares to just 5% estimated for an earlier period for an overlapping but larger region in Europe (Kauppi et al. 1992), an improvement at least partly attributable to improved methods of estimation. The relative role of forests varied widely from country to country. In Latvia, for example, forests more than offset the domestic fossil-fuel emissions. Forests in Lithuania, Sweden, Slovenia, Bulgaria and Finland all absorbed a large part of national emissions. In contrast, lightly forested countries such as Belgium, Ireland, the Netherlands, Cyprus and Denmark had small carbon sinks. Sequestration in ecosystems is difcult to quantify, although improvements in current methods (Ciais et al. 2008) and further development of remote sensing technologies (Achard et al. 2002), if globally developed and adopted, may offer new possibilities. Important factors that are lacking detailed quantication are land-use change and forest products embodied in international trade. How does demand for beef, palm oil, or paper (for example) in one country lead to land-use change in another? Recent studies suggest that the emissions from land clearing to expand bio-fuel production can be considerable (Fargione et al. 2008). Likewise, the import of forest products represents a transfer of carbon between nations and can impact forest biodiversity elsewhere (Berlik et al. 2002; Mayer et al. 2005). At the present time there are no global studies, to our knowledge, that quantify the impact of domestic consumption on land-use change and forest carbon abroad. Three of the four factors that impact on national atmospheric CO2 responsibility can be tentatively quantied, Figs. 1 and 2. International transport is not included due to difculties in allocating responsibility and land-use change embodied in international trade is not included because of a lack of data. The quality of the estimates shown can be ranked as follows: fossil domestic emissions (Marland 2008) > emissions embodied in trade (Wiedmann et al. 2008) > tree vegetation sink (Grainger 2008), the data on the fossil emissions being much more accurate and precise than those on the vegetation sink. Tree vegetation sinks are only one component of the ecosystem dynamics. Additional sinks exist in forest soils, harvested wood products, residential constructions, buildings, landlls, lake sediments, etc. An inclusion of these additional factors would increase the importance of the sequestered carbon stock (Ciais et al. 2008). There is a further challenge for dealing with responsibility for changes in the carbon stocks of the biosphere because some observed changes are the result of human decisions and some are the result of natural processes. Forest stocks might change because of wood harvests or because of changes in rainfall patterns, nitrogen deposition, or atmospheric carbon dioxide concentrations, and these are not always easily distinguished (Schlamadinger et al. 2007). In this paper we estimate the full forest transition averaged over the period 1990 to 2005, but it is widely argued (for example in the Kyoto Protocol) that attribution for mitigation purposes should be limited to changes directly driven by human decisions (see e.g., Canadell et al. 2007a). Over the period 19902005 the tree vegetation sink was signicant in the US, but insignicant in Russia, Fig. 1. In densely populated countries such as Denmark, the Netherlands or the UK, trees did not capture and store much carbon per capita. In

Climatic Change (2009) 97:379388 Fig. 1 Domestic fossil and cement emissions averaged 20032005, tree vegetation sink as the average for 19902005, net emissions embodied in trade, and net responsibility of CO2 in the atmosphere for key emitting countries and regions. Positive numbers refer to emissions, negative numbers to removals of CO2 . The upper chart is per capita emissions and the lower chart is total emissions

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contrast, the impact of forests on the national carbon budget was signicant in lightly populated but densely forested EU-countries such as Finland and Sweden, Fig. 2. Trade led to a large reallocation of emissions, ranging from a 22% net export for Russia to a 15% net import for Japan, both measured relative to domestic emissions, Fig. 1. In China, trade-embodied emissions, along with carbon sinks in expanding forests, reduced the national CO2 responsibility by almost a quarter. We emphasize that our analysis does not capture the recent growth in Chinese CO2 emissions (Gregg et al. 2008) and international trade (Guan et al. 2009). On the other hand, the national CO2 responsibility of the EU27, US and Japan was increased due to imported carbon emissions. Approximately half of the trade-induced increase was captured and stored by tree vegetation in these regions. The neighbouring Baltic countries Latvia and Estonia reported contrasting change of vegetation, which may reect uncertainties in the forest inventory information available to these countries. For the EU-countries, the Czech Republic had a net export equal to 15% of domestic emissions, while Latvia had a net import of 60% of its domestic emissions. Economic specialization and the geographic location relative to the neighbouring countries

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Fig. 2 Domestic fossil and cement emissions averaged 20032005, tree vegetation sink as the average for 19902005, net emissions embodied in trade, and net responsibility of CO2 in the atmosphere for European Union member countries except Malta. All data are per capita

affects trade balance more strongly in small EU member countries than in large and relatively autonomous nations such as the US and China (Peters and Hertwich 2008a). The relative role of embodied emissions and ecosystem sinks will increase over time, if countries are successful in reducing domestic emissions of fossil-fuel carbon. International trade and transport has been growing more rapidly in comparison to other macro-variables that drive global emissions, such as population and economic growth, Fig. 3 (also see Raupach et al. 2007). Assuming that fossil-fuel emissions

Fig. 3 The growth in various global macro-variables since 1990population, dross domestic product (GDP) and international trade in constant US dollars, domestic fossil-fuel and process CO2 emissions, and the emissions from bunker fuel sales used as a proxy for international transport

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are reduced by 20% while the other factors are unchanged, the impact of embodied emissions on the EU, for example, will automatically increase from +13 to +16% by 2020. The relative growth is likely to be even larger if the rapid development in global trade continues, Fig. 3 (Peters and Hertwich 2008c), particularly from emerging economies such as China (Weber et al. 2008; Guan et al. 2009). Likewise, with increased international trade and air travel, the emissions from international transportation will increase. The rate of forest recovery, which drives the vegetation sink, has been signicant (Ciais et al. 2008; Kauppi et al. 2006) and new research has found that even old-growth forests can be signicant carbon sinks (Luyssaert et al. 2008), although the future is uncertain. We note that this paper deals with responsibility for emissions and sinks of carbon dioxide, the most important of the greenhouse gases and the climate forcing factor most often addressed in current mitigation policy. It does not deal with the full complexity of responsibility for changes in the climate system. There are other greenhouse gases, atmospheric components like sulphur and black carbon, that inuence the climate system (Fuglestvedt et al. 2008; Hansen et al. 2000). In addition, changes in ecosystem carbon affect the climate system not just through their carbon balance but also through biophysical effects such as surface albedo, surface roughness, and latent heat transfer (e.g., Betts 2007; Jackson et al. 2008). Ultimately, the challenge is to develop a policy framework that can take into account our improving understanding of the full climate system, including different levels of uncertainty for different climate forcings. Policies that are ineffective in protecting the climate or that provide perverse incentives must be avoided. It is hence important to design mechanisms and standards for including new factors affecting the climate responsibility of countries as our knowledge improves. Furthermore, safeguards must be developed to avoid worsening those factors that are not yet included in the assignment of responsibility. In the mean time, a better understanding of a countrys impact on the stock of CO2 in the atmosphere will point to new opportunities for climate mitigation, such as increasing the efciency of international transport, improving the ways in which imported products are produced, connecting with the role of consumption (Hertwich 2005), and avoiding deforestation or protecting and enhancing ecosystem sinks. More focus is needed on understanding the interaction between the physical carbon cycle and role of society in affecting the carbon cycle. Focusing climate policy solely on domestic production-based fossil emissions can lead to false solutionssolutions that shift emissions to other regions, generate unnecessary transport or reduce ecosystem carbon stocks. Policies that decelerate unnecessary outsourcing of emissions (Peters 2008; Peters and Hertwich 2008b), decelerate the growth of emissions from international trafc (den Elzen et al. 2007), and protect and enhance forest biomass at the global level (Canadell and Raupach 2008) can be explicit themes in international climate negotiations. A more comprehensive understanding of how life styles and consumption patterns impact global emissions will provide policy making with a comprehensive basis for a more diversied approach to international environmental policy.

Acknowledgements 1117822.

L.S., A.R. and P.E.K. were supported by the Academy of Finland, Grant #

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Appendix: Methods and data The national fossil fuel and process emissions were estimated by taking the 3-year average (20032005) from CDIAC (Marland et al. 2007). The CDIAC inventories include emissions from cement production but are missing the emissions from nonfuel uses of hydrocarbons (for example as solvents and lubricants). Consequently, nationally reported inventories will show slightly higher emissions. The population data for each country are the 3-year average (20032005) from Eurostat (Europe) and the UN ESA country proles for 2005 only (China, Japan, Russia, and USA). The data for Fig. 3 are from the U.S. Census Bureau, International Data Base (Population, http://www.census.gov/ipc/www/idb/), CDIAC (Marland et al. 2007) (emissions), and the United Nations (gross domestic product and international trade, http://data.un.org/). The emissions embodied in trade for 2004 were estimated by assuming that the share of emissions embodied in trade relative to domestic emissions in 2001 (Peters and Hertwich 2008a) was the same in 2004. Given the dynamic growth of trade relative to domestic production, it is likely this is an underestimate, Fig. 3 (Peters and Hertwich 2008c). The calculations consider all the supply chain emissions in a given country to produce exported products (Peters and Hertwich 2008a). The annual sequestration of carbon in forests was calculated using the Forest Identity (Kauppi et al. 2006; Waggoner and Ausubel 2007)a form of decomposition analysis that breaks down changes in forest carbon stock to changes in forest area, forest density, allometric ratio and the carbon concentration of biomass. Data for forest area and growing stock volume in forests were obtained from Forest Resource Assessment (FRA) 2005 country tables (http://www.fao.org/forestry/32091/en/). The forest density (D) was calculated by dividing growing stock volume by forest area in each country. The allometric ratio (B; tons/m3 ) for each country was estimated from FRA 2005 country tables as the sum of the ratios of above-ground biomass, below-ground biomass and dead wood to growing stock. Where data required for calculating a country-specic value for one of these ratios (most often dead wood) was not available, the ratio was adopted from the country with the most similar climate and forest management history. The carbon content of biomass, C, was assumed constant at 0.5 tons carbon/ton of biomass. Annual rates of change in area and density, a, d and b , were calculated in previous work (Kauppi et al. 2006) and the annual rate of change of tree biomass (M) was calculated using the following formula: m = a + d + b . Due to the assumption of constant carbon content in biomass (C), the carbon sink in tree vegetation is estimated proportional to the rate of change of biomass.

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