The UK’s Net Zero strategy was developed following the country’s commitment to a binding target of net zero greenhouse gas emissions by 2050. This refers solely to territorial emissions – those which are produced within the UK’s borders.
However, territorial emissions account for only half of the UK’s consumption emissions – often referred to as a ‘Carbon Footprint’. These are all the emissions associated with the consumption of a country’s residents and industry, regardless of where in the world those emissions are produced.
Exclusively addressing the direct emissions of a country’s production will neglect the (often substantial) proportion of emissions which are produced elsewhere to satisfy that country’s demand. For example, a ‘zero emission’ electric car imported to the UK will still have significant emissions associated with its upstream manufacturing and raw materials processing elsewhere in the world.
The central goal of the Paris Agreement is to keep global warming below 2°C compared to pre-industrial levels. However, the details on how to reduce UK emissions accordingly do not distinguish between consumer and producer. This puts a greater burden of responsibility to developing countries, which typically utilise less efficient technologies, have higher grid intensities and laxer climate policies.
Using a consumption-based accounting approach to climate policy will shift this burden back to the demand side, with the onus now on developed countries to enact on the impact of their consumption. This will make it essential that we account for the emissions embedded in UK imports in order to address our true contribution to climate change.
UK consumption: key challenges for change
Shifting the burden of responsibility onto the country of consumption is much easier said than done.
Consumption-based accounting requires adequate measurement of emissions in order to track the effectiveness of any policies, but this has long been a calculation complicated by insufficient data, ill-defined methodologies and a lack of coordination between system actors. Additionally, whether the onus lies on the government to introduce consumption-based policies, or on industry to take greater responsibility for emissions in their supply chains, the current focus on territorial emissions provides little incentive all round to invest in a demand-side response.
Data & methodologies
If you can’t measure it, you can’t manage it. In order to be able to quantify the emissions embedded in the products we consume, we need a deeper understanding of the methodologies at our disposal and further development of the tools required. On top of this, the data we use must be readily available, of high quality and coherent with other data sets.
Standardisation & harmonisation
Consumption-based carbon accounting is one step towards assuming responsibility for the emissions that are produced in the process of making the products that we ultimately consume. However, without both industrial and international agreement over the methods used for quantifying emissions and attributing responsibility, any claims relating to the level of carbon emissions in a product or of a country will be fraught with inconsistencies.
Government focus & incentive
With the UK’s net zero target solely focussed on reducing territorial emissions, there is currently little incentive to reduce our emissions from a consumption perspective. Whether it be through direct policy that promotes further industry reporting, or resource efficiency schemes to reduce overall consumption, there must be a shift in mindset that ultimately considers the emissions we consume in tandem with those that we create.
International initiatives: policy lessons for the UK
Leading the way: Sweden sets national climate targets on consumption emissions
Although the UK was the first country to begin reporting on consumption emissions, it was not until early 2022 that any country made a legislative commitment to including emissions embedded in imports into their climate targets. This will make Sweden – a reasonably small but trade-dependent country – the first in the world to have set national climate targets on consumption emissions.
Sweden is a net importer of emissions by more than 60% (i.e., over 60% of Sweden’s consumption-based emissions occur outside of the country). As a country with comparatively low emissions from production compared to the ‘big emitters’ such as China or Russia, consumption-based targets make sense in order for the country to have a meaningful impact on climate change.
Although the details on their strategy are still being configured, it is thought that the country will place significant attention towards actively targeting consumption patterns and reducing consumption, embracing schemes such as product passports that disclose the total climate impact, and imposing quota obligations on recycled and sustainable materials.
USA ‘Buy Clean’ policy – green or greenwashing?
Government procurement policy can be extremely effective in driving industrial innovation and incentivising companies to follow environmentally friendly practices. This is particularly valuable in the construction sector, as embodied carbon in construction materials account for around 11% of all global carbon emissions.
The ‘Buy Clean’ policy in the US is a procurement policy approach which incorporates low-carbon construction requirements into government purchasing. By setting maximum global warming potential limits on construction products, as well as requiring disclosure of data on embedded emissions, policies such as these can incentivise the construction sector and associated suppliers to pay greater attention to emissions in their supply chain.
Unfortunately, much of the ‘Buy Clean’ legislation currently being rolled out has a very narrow focus, and only targets a few construction materials. This approach fails to capture sizeable embedded emissions in highly carbon-intensive materials, such as concrete, cement and aluminium. With the cement industry alone being responsible for about 8% of all global CO2 emissions, omitting these materials might significantly limit policy effectiveness.
Whilst initiatives are beginning to crop up which explicitly target embedded emissions, there is still no worldwide consensus that responsibility for greenhouse gas emissions should lie with the country of final consumption.
If the UK government wished to follow in Sweden’s footsteps and get ahead of the trend, there are a number of measures that should be considered:
- Integrate data-collection tools into resource efficiency and circular economy programmes. These have the potential to deliver enormous carbon savings both territorially and from a consumption perspective, but will require significant data collection in order to design and monitor them effectively. By developing these programmes with a view to collect and store materials data in a coherent and accessible database, we could see significant benefits should we look to access this data in the future from a consumption-based accounting perspective.
- Explore sector initiatives to identify parallel opportunities for data collection and carbon reporting. Recognition of the high levels of embodied emissions in construction materials has led to a greater focus on policy to reduce the impact of the built environment. Once the effectiveness of these policies is understood, governments should look to see how these can be adapted for other sectors.
- Investigate the need for a ‘guiding principles programme’ for sustainability, to facilitate harmonised industry reporting. Following the declaration of a climate emergency and the global warming-triggered events of the past few years, industry will soon be dependent on their sustainability performance in order to stay competitive. By developing a guiding programme to diffuse the relevant tools and knowledge around industrial sustainability, governments can gear up industry to tackle embodied emissions alongside other climate-related challenges in the future.