Editing IPCC:AR6/WGIII/Chapter-2 (section)

=== 2.3.1 Scope, Variability and Uncertainty of CBEs ===

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Consumption is increasingly met by global supply chains often involving large geographical distances and causing emissions in producing countries ( [[#Hubacek--2014|Hubacek et al. 2014]] , 2016; [[#Wiedmann--2018|Wiedmann and Lenzen 2018]] ). Therefore, accounting for emissions from production along the entire supply chain to fulfil final demand, – so-called consumption-based emissions (CBEs), – is necessary to understand why emissions occur and to what extent consumption choices and associated supply chains contribute to total emissions, and ultimately how to influence consumption to achieve climate mitigation targets and environmental justice (Vasconcellos 2020).

Production-based emissions (PBEs) and territorial emissions resulting from the production and consumption of goods and services within a region (for both domestic use and export) are often used by authorities to report carbon emissions ( [[#Peters--2008|Peters 2008]] ) ( [[#2.2|Section 2.2]] ). PBEs also include emissions from international activities (e.g., international aviation/shipping and non-resident activities), which are excluded from territorial emissions ( [[#Karstensen--2018|Karstensen et al. 2018]] ; [[#Shan--2018|Shan et al. 2018]] ). In contrast, CBEs refer to emissions along the entire supply chains induced by consumption, irrespective of the place of production ( [[#Liu--2015|]] [[#Liu--2015|Liu et al. 2015]] b). This reflects a shared understanding that a wider system boundary going beyond territorial emissions is important to avoid outsourcing of pollution and to achieve global decarbonisation. CBEs allow for the identification of new policy levers through information on a country’s trade balance of embodied emissions, households’ carbon implications of their lifestyle choices, companies’ upstream emissions as input for supply chain management, and cities’ footprints outside their administrative boundaries ( [[#Davis--2010|Davis and Caldeira 2010]] ; [[#Feng--2013|Feng et al. 2013]] ). [[#Kander--2015|Kander et al. (2015)]] proposed a technology-adjusted consumption-based emission accounting (TCBA) approach to address the issue of carbon intensity in exports. TCBA incorporates emissions embodied in trade but also adjusted for differences in carbon efficiency in exports of different countries. Unlike PBEs, there are no internationally agreed approaches to calculate CBEs, making it a major drawback for mainstreaming the use of this indicator in policymaking.

There are other proposed emission accounting approaches used in different circumstances. Historical cumulative emissions (HCEs) are used when analysing countries’ historic contribution to emissions and responsibility for emission reduction. HCEs account for a country’s cumulative past emissions, which may be different from the country’s current annual emissions ( [[#Botzen--2008|Botzen et al. 2008]] ; [[#Ritchie--2019|Ritchie 2019]] ), but are sensitive to the choice of cut-off period. For example, the USA and EU-27 countries plus the UK contributed respectively 13.3% and 8.7% to global PBEs in 2019 ( [[#Crippa--2020|Crippa et al. 2020]] ), however, they emitted around 25% and 22% of global historical PBEs since 1751 ( [[#Ritchie--2019|Ritchie 2019]] ). Extraction-based emissions (EBEs) accounting allocates all emissions from burning fossil fuels throughout the supply chains to the country where the fuels were extracted ( [[#Steininger--2015|Steininger and Schinko 2015]] ). EBEs can be calculated by multiplying primary energy extraction of fossil fuels with their respective carbon content ( [[#Erickson--2013|Erickson and Lazarus 2013]] ). Another approach for accounting emissions is income-based emission (IBE), which traces emissions throughout all supply chains and allocates emissions to primary inputs (e.g., capital and labour). In other words, IBEs investigate a country’s direct and indirect downstream GHG emissions enabled by its primary inputs ( [[#Liang--2017|Liang et al. 2017]] a). All these approaches provide complementary information and different angles to assigning responsibility for emissions reductions.

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