Sustainability and policy - Climate Change: Biological and Human Aspects - page 501

indeed, less so in) China has translated into material wealth for its citizens. India
and China have provided developed nations with cheap goods manufactured with
the energy from fossil carbon. If you like, China and India are gaining fossil carbon
emissions from other developed nations that (having declined their industrial base)
are economically leaking fossil carbon from their economies to China and India.
If developed nations were not buying goods from China and India then not only
would China and India's emissions be lower but the developed nations' emissions
would be higher (through having to manufacture the goods themselves). The IPCC
defines (economic fossil) carbon leakage as 'the increase in carbon dioxide emissions
outside the countries taking domestic mitigation action divided by the reduction in
the emissions of these countries'. It also focuses more on oil-exporting countries
than the fossil carbon used to generate internationally traded goods. The IPCC 2007
assessment covers the question of economic carbon leakage in its Working Group III
report on mitigation (IPCC, 2007b) but notes that 'critical uncertainties' remain as
to its assessing the scale of the problem.
The traditional view has been that this international shift in industry and manu-
facture is all part of globalisation and necessary to bring living standards in China
and India up to those in developed nations. However, a view borne of understand-
ing the drivers of emissions globally is different. In 2008 Glen P. Peters and Edgar
G. Hertwich from the Norwegian University of Science and Technology presen-
ted the following analysis. They found emissions of over 5.3 GtCO 2 , or 1.44 GtC,
embodied in international trade flows (increase this by a further 7.5% if the energy
in the international transportation of goods is taken into account): this compares
with the average annual global fossil fuel emissions in the 1990s of 6.4 GtC. From
a global climate change perspective, they argue, it is more desirable to have pro-
duction occur where it is environmentally preferable and then trade the products
internationally. That is to say, it would be better for Europe to manufacture its own
goods as its power stations and industrial processes are more efficient than countries
like China. Another approach to reduce the impact of trade on climate policy, they
say, is to adjust emission inventories for trade. Currently, emission inventories are
production-based and this causes a separation between a country's consumption and
the global production system. Arguably, it is this separation that causes the competit-
iveness concerns in the Kyoto Protocol. With consumption-based emission inventories
consistency is returned between a country's consumption (which occurs domestic-
ally) and the production system required for the consumption (which occurs globally).
Consumption-based inventories eliminate carbon leakage and encourage mitigation
to occur where the costs are lowest.
8.3.5 Casestudy:AustraliaandNewZealand
Australia's energy and fossil energy sustainability has been one of self sufficiency
throughout much of the latter half of the 20th century. Indeed, since 1980 its energy
balance has become one of significant export compared to its domestic needs (see
Figure 8.8). In part because of this - Australia has a strong fossil fuel lobby - climate
change has been a politically contentious issue. Australia's emissions per person
are among the highest in the world and roughly comparable to those of US and