Has the EU met its emission reduction targets under the Kyoto Protocol? Not if emissions associated with goods Europe imports from Asia are taken into account. So finds a study published this week in Proceedings of the National Academy of Sciences (PNAS).

The study, Growth in emission transfers via international trade from 1990 to 2008, calculates the net increase in global carbon dioxide (CO2) emissions resulting from developed countries’ imports of goods produced in developing countries. The study provides additional evidence of Kyoto’s futility, although the authors, a team of Norwegian, German, and U.S. researchers, don’t draw this conclusion and would likely deny it.

Some key findings:

• Global CO2 from the production of traded goods increased from 4.3 gigatons (Gt) in 1990 (20% of global emissions) to 7.8 Gt in 2008 (26%).
• Emissions from production of exports increased 4.3% annually, faster than the growth in global population (1.4% per year), CO2 emissions (2.0% per year), and GDP (3.6% per year), although not as fast as the dollar value of international trade (12% per year).
• Global emissions increased 39% from 1990 to 2008. At the regional level, emissions from developed countries (classified as “Annex B” countries in the Kyoto Protocol, with quantified emission limitations) largely stabilized, but emissions from developing countries (non-Annex B) doubled.
• However, territorial emission inventories don’t take into account “consumption-based emissions” — CO2 emitted in developing countries to produce goods consumed in developed countries.
• The “net emission transfers” via international trade from developing to developed countries increased from 0.4 Gt CO2 in 1990 to 1.6 Gt CO2 in 2008 — 17% per year average growth. 
• Developed countries ”imported” more emissions than they reduced domestically via efforts to comply with the Kyoto Protocol.
  • “For comparison, if the average emission reduction target for Annex B countries in the Kyoto Protocol (~5% reduction of 1990 emissions) is applied to CO2 emissions only, representing ~0.7 Gt CO2 per year, then the net emission transfers from non-Annex B to Annex B countries is 18% higher on average (1990-2008) and 130% higher in 2008.”
  • “Because estimated Annex B emission reductions from 1990 to 2008 are only ~ 2%, representing only 0.3 Gt CO2, the net emission transfers from the group of non-Annex B countries is 520% higher in 2008.”
  • “Collectively, the net CO2 emissions reduction of ~2% (0.3 Gt CO2) in Annex B countries from 1990 to 2008 is much smaller than the additional net emission transfer of 1.2 Gt CO2 from non-Annex B countries . . .”
• China’s emissions accounted for 55% of the growth in global CO2 emissions from 1990 to 2008. Chinese exports accounted for 18% of the growth in global emissions and for 47% of the growth in Annex B consumption-based emissions.
• Curiously, “International trade in non-energy-intensive manufactured products dominates the net emission transfers (accounting for 41% of the growth), despite the policy focus on energy-intensive manufacturing.”

In the discussion section of their paper, the authors observe that the increase in consumption-based emissions “may benefit economic growth in developing countries, but the increased emissions could also make future mitigation more costly in developing countries.” Right, but that has two obvious implications the authors do not mention: (1) Developing countries are unlikely to accept mandatory emission limits in the foreseeable future; and (2) Kyoto-like controls on developing country emissions could be harshly disruptive to global trade and investment.

The authors argue that the rapid growth in “imported” emissions is not a case of “carbon leakage” — the flight of capital, jobs, and emissions from countries with CO2 controls to countries lacking such controls. They find, for example, that “both the United States and European Union have had a large increase in net emission transfers, but only the European Union has a broad-based climate policy.”  

Undoubtedly multiple factors contribute to the rapid growth of China’s export sector. However, one factor boosting investment in China is low energy cost. A closely related factor is the regulatory certainty that Beijing will not slap a price on carbon in the policy-relevant future or erect political roadblocks to the development of energy resources and infrastructure. How very different is the political climate in the USA! 

America may not have a “broad-based climate policy,” but we have an EPA bent on ‘legislating‘ climate policy via the Clean Air Act, an EPA implementing a panoply of non-climate regulations with the same (or even greater) potential to suppress electric generation from coal, regional greenhouse gas policies, state-level renewable energy mandates, an environmental movement hostile to fossil fuels and natural resource development, politicians in Congress and the White House imbued with the same mentality, and countless NIMBY activists determined to block construction of all energy-related infrastructure.

The researchers, methinks, take too narrow a view of the policy-related risks that can cause or contribute to carbon leakage.