Oregon’s New Carbon Footprint of Consumption

By By David Allaway

As states and local communities attempt to reduce greenhouse gas emissions, they typically begin with a greenhouse gas inventory – an accounting of how the community contributes to emissions. These inventories provide a baseline against which reduction goals are set, as well as an ongoing framework for measurement. Inventories also serve as the primary basis for communicating with policymakers and interested parties how the state contributes to global warming.

Over the past two decades, a relatively standard method has evolved to account for emissions at the sub-national scale. It involves quantifying emissions that physically originate within a geographic boundary, such as the state’s borders. For more than a decade, the State of Oregon has used this geographic approach as the basis for official state inventories, with one important exception. Oregon was one of the first states to account for emissions associated with electricity used within the state, regardless of where generation occurs. As such, Oregon’s inventory reflects emissions that can be reduced through in-state actions such as electricity conservation and renewable power requirements. However, even with the adjustment for electricity, Oregon’s traditional inventory presents an incomplete picture because it omits many of the emissions associated with consumption of products and materials.

The limits of the traditional geographic approach are exemplified by the United Kingdom. Between 1992 and 2004, the UK’s in-boundary emissions fell by almost 5 percent. Celebrated in most circles as a sign of the UK’s success at reducing emissions in line with Kyoto Protocol obligations, the underlying story was more complex. During these years, the UK experienced a significant movement of industry to countries where, on average, production is more carbon-intensive than in the UK. The greenhouse gas emissions associated with producing the goods actually increased. But due to lower labor costs, the prices paid by UK consumers fell. This created a double-whammy for emissions: the carbon footprint of goods increased, even as UK consumers purchased increasing numbers of those goods. When the UK took the unprecedented step of commissioning a consumption-based greenhouse gas inventory, it discovered that emissions associated with UK consumption rose by almost 18 percent during the same time period.1 In fact, more recent research has shown that among countries pledging emissions reductions under the Kyoto Protocol, their “counting” (domestic) emissions reductions between 1990 and 2008 were dwarfed by an increase in emissions associated with imports.2

Until recently, no state in the U.S. had estimated its consumption-based emissions. The Oregon Department of Environmental Quality changed that in October, with publication of an estimate of Oregon’s greenhouse gas emissions. This consumption-based inventory estimates the emissions – globally distributed – resulting from consumption in Oregon. Like the conventional approach, the consumption-based inventory, by itself, also tells an incomplete story. In addition, results of the consumption-based inventory are generally less precise than the conventional inventory. But only by looking through both lenses does one fully understand how Oregon contributes to climate change – as a result of both production and consumption.

Results

DEQ’s consumption-based inventory estimates emissions for calendar year 2005. Emissions may be estimated for future years as resources allow.

For 2005, global emissions associated with Oregon consumption were almost 50 percent higher than Oregon’s territorial emissions. More than half of Oregon’s consumption-based emissions occur in other states (31 percent) or nations (23 percent). While the direct consumption of electricity and fuels contribute to emissions (15 percent and 26 percent respectively), consumption of materials contributes more – between 35 percent and 48 percent of the total. Consumption of services (including legal services) rounds out the total with 11 percent to 24 percent.

Among materials, and setting aside the large emissions associated with product use (such as fuel-burning cars and furnaces), most emissions occur far upstream of the consumer, primarily in manufacturing. Freight contributes surprisingly little, as does disposal. Categories of materials with significant “upstream” emissions include food, construction, heavy machinery, furnishings and supplies, vehicles, electronics, clothing and medicines.

Another way to look at emissions by product category is to consider emissions intensity, normalized to volume of consumption. Oregon’s study expresses intensities as emissions per dollar of consumption. This gives an indication of the emissions impacts of a given unit of spending. When Oregonians make choices about how to spend their discretionary income, the climate impact can be significant. For example, electricity had a 2005 emissions intensity of almost 7 kilograms carbon dioxide equivalents per dollar (CO2e/$); fuels are next at almost 6 kg CO2e/$. Materials, while contributing the most to emissions, have emissions intensities 10 times lower on average (about 0.55 kg CO2e/$ on average, although several types of food have intensities above 2 kg CO2e/$). Services tend to have the lowest emissions intensities (0.17 kg CO2e/$, on average), with a few notable exceptions (garbage service and air travel).

The model used to estimate these emissions is a multi-regional one, which allows for comparisons of emissions intensities between different regions. Intensities can vary widely. For example, the emissions intensity of Chinese- and Indian-made clothing is roughly five times higher than clothing made in Mexico (2.0 kg CO2e/$ vs. 0.4 kg CO2e/$). U.S. production often has lower emissions intensity than many of the countries it relies on for imports. However, these results require great care when interpreting, as the project’s report makes clear. Regardless, if “local is better” from a greenhouse gas perspective, it often is not a consequence of lower freight impacts, as commonly assumed, but rather, differences in production conditions.

The consumption-based inventory sheds new light on how Oregon contributes to emissions and, by extension, opportunities to reduce those emissions. Some findings – such as the importance of buildings and transportation fuels – are consistent with the conventional inventory. Others – such as the importance of products, and potential roles for strategies such as supply chain management, producer responsibility, carbon footprinting and “sustainable consumption” – result from the particular accounting lens of consumption. In any event, Oregon now has a more complete framework by which to consider our carbon footprint and options for reducing it. We hope that other states will follow suit.

David Allaway is a senior policy analyst at the Oregon Department of Environmental Quality.
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1 Wiedmann, T., Wood, R., Lenzen, M., Minx, J., Guan, D. and Barrett, J. (2008) Development of an Embedded Carbon Emissions Indicator – Producing a Time Series of Input-Output Tables and Embedded Carbon Dioxide Emissions for the UK by Using a MRIO Data Optimisation System, Report to the UK Department for Environment, Food and RuralAffairs by Stockholm Environment Institute at the University of York and Centre for Integrated Sustainability Analysis at the University of Sydney, June 2008. Defra, London, UK
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2 Peters, G., Minx, J., Weber, C., and Edenhofer, O. (2011) Growth in emissions transfers via international trade from 1990 to 2008, published April 25, 2011 in the Proceedings of the National Academy of Sciences of the United States of America.
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Project web page and reports:

http://www.deq.state.or.us/lq/consumptionbasedghg.htm

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