COLUMN-EU inflates CO2 achievement, ignores imports: Gerard Wynn

Thu Oct 25, 2012 1:44pm GMT
 

(The author is a Reuters market analyst. The views expressed are his own.)

By Gerard Wynn

LONDON Oct 25 (Reuters) - The European Union is inflating its position as a leader in tackling global climate change by ignoring the impact of its fall in industrial competitiveness, which means the region is now importing more carbon-intensive goods.

Carbon dioxide (CO2) emissions from burning fossil fuels in west Europe have fallen over the past two decades, but the carbon content of consumption accounting for net imports has risen.

Focusing purely on emissions by territory, as the EU does, ignores global international trade as if all economic activity were in isolation. It is a kind of smoke and mirrors that only tells half the story.

Such incomplete data help explain why the Kyoto Protocol has achieved so little to clean industrial pollution as it has diminished the impact of CO2 reduction targets by making these easier to achieve.

Climate Commissioner Connie Hedegaard said this week the EU had cut its environmental impact even while its economy grew, implying it had achieved the Holy Grail of sustainable growth.

"While our economy grew 48 per cent since 1990, emissions are down 18 per cent. These figures prove once again that emissions can be cut without sacrificing the economy," she said.

It is true that the EU has grown its economy much faster than its emissions, reflecting a long-term trend towards efficiency, but by selecting one favourable measure it exaggerates its success.

Consumption emission figures which account for net imports tell a different story, through 2008: GDP up 46.8 percent, CO2 down just 1.8 percent.

Consumption emissions have actually risen in western Europe. Wider EU emissions have fallen only because of an industrial collapse in eastern Europe in the aftermath of the fall of communism in 1989.

CONSUMPTION VS PRODUCTION

Production emissions, which mostly come from the burning of fossil fuels to produce energy for households and industry, are the usual measure of CO2. (Chart 1)

It is easy to measure, calculated from widely available data on fossil fuel consumption, and is the default U.N. figure used for reporting emissions under international targets.

An alternative measure of consumption emissions is more difficult to estimate, showing the impact of consumption of a country's people and industry on global climate change.

It records the CO2 embodied in goods consumed by a country's people and industry, including imports and excluding exports.

This measure is more relevant when assessing progress towards a low-carbon economy. (Chart 2)

RISING

Comprehensive data on consumption emissions have been developed by Glen Peters at Norway's Centre for International Climate and Environmental Research, showing trends from 1990-2008.

They show the EU's consumption emissions fell 1.8 percent, while production emissions fell 6.5 percent against the 1990 baseline used by Hedegaard.

The results are more stark after removing a quirk of that baseline, which coincides with the immediate aftermath of the fall of communism when industrial manufacturing in eastern Europe contracted sharply.

Consumption emissions of the 15 western European member states have risen 3.7 percent.

A 2011 journal article that accompanied the data, "Supply chain of CO2 emissions", reinforces the point.

The paper published in the U.S. Proceedings of the National Academy of Sciences showed the European Union was by far the world's single biggest net importer of carbon.

It showed that the EU imported a net 2.621 billion tonnes of carbon dioxide in 2004, far exceeding the United States in second place.

KYOTO

If the bloc's performance were based on a measure of consumption of goods and services, the EU would not meet its carbon reduction targets under the Kyoto Protocol.

The original 15 members of the EU at the time of the signing of Kyoto had a target to cut emissions by 8 percent by 2008-2012 from 1990 levels.

The first round of Kyoto ends this year and has failed from the perspective of global emissions.

Since Kyoto was signed in 1997, global carbon emissions have risen by 2.4 percent annually, twice the annual rate in the decade before it was signed, notwithstanding the financial crisis since 2008.

A carbon accounting system that allowed the EU to ignore its rising, carbon-intensive imports from China has not helped, particularly since China's emissions were not regulated by the protocol.

The value of EU-27 imports from China almost tripled between 2001 and 2008, according to Eurostat, the Statistical Office of the European Union.

There is no denying the EU's achievements on climate change.

It has the most ambitious targets globally to cut carbon, the broadest mandate to shift to renewable energy, and is leading U.N. climate negotiations, which may have collapsed without its willingness to adopt reduction targets.

But a nuance is missed when developed countries exhort emerging economies to do more about their rising emissions, when failing to acknowledge that their own consumption is partly responsible. (editing by Jane Baird)

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