Telecoupled CO2 emissions: Implications of the growing dependence on internationally traded carbon
Parties that extract fossil fuels, parties that burn the fuels to produce goods and services, and parties that consume those goods and services all benefit in some way from the current fossil fuel-driven economy, just as they are all vulnerable in some way to the climate change and pollution that results. International efforts to resolve this dilemma depend on fully understanding the interests that all these parties have both in maintaining current patterns of energy use and transitioning to new patterns of energy use.
Using a multiregional input-output model built with harmonized economic, trade, and CO2 emissions data from four versions of the Global Trade Analysis Project (GTAP) database, global CO2 emissions are tracked from the source of extracted fossil fuels through the production of emissions during combustion of those fuels to the consumption of goods and services related to those emissions in order to generate a consistent set of accountings that span the global supply chain of CO2 emissions, including trends over a 10-year period.
The fraction of fossil carbon being traded internationally is large and growing. In 2007, 10.8 billion tons (Gt) of CO2 or 37% of global emissions were from fossil fuels traded internationally (up from 8.0 Gt CO2 and 36% in 1997) and an additional 6.9 Gt CO2 or 24% of global emissions were embodied in traded goods (up from 4.3 Gt CO2 and 20% in 1997). Thus, although a growing number of countries regulate CO2 emissions that occur within their borders, the goods and services consumed in those countries also increasingly depend upon fossil fuels extracted and burned in other countries where CO2 is not regulated. In this way, international trade may undermine the effectiveness of national and regional climate policies and expose countries to the economic effects of climate policies put in place by its trading partners.
Despite the large volume of trade, fossil carbon is highly concentrated at each of the three different accounting points (extraction, production, and consumption), with the top-five regions at each point making up approximately two-thirds of global emissions throughout the period 1997–2007. This suggests that agreement among even a small number of countries could lead to effective international climate policy.