Consumption-based greenhouse gas emissions accounting with capital stock change highlights dynamics of fast-developing countries.

Abstract

Traditional consumption-based greenhouse gas emissions accounting attributed the gap between consumption-based and production-based emissions to international trade. Yet few attempts have analyzed the temporal deviation between current emissions and future consumption, which can be explained through changes in capital stock. Here we develop a dynamic model to incorporate capital stock change in consumption-based accounting. The new model is applied using global data for 1995-2009. Our results show that global emissions embodied in consumption determined by the new model are smaller than those obtained from the traditional model. The emissions embodied in global capital stock increased steadily during the period. However, capital plays very different roles in shaping consumption-based emissions for economies with different development characteristics. As a result, the dynamic model yields similar consumption-based emissions estimation for many developed countries comparing with the traditional model, but it highlights the dynamics of fast-developing countries.