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How responsible is a region for its carbon emissions? An empirical general equilibrium analysis

Turner, Karen and Munday, Max and McGregor, Peter and Swales, John (2012) How responsible is a region for its carbon emissions? An empirical general equilibrium analysis. Ecological Economics, 79. 70–78. ISSN 0921-8009

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Abstract

Targets for CO2 reduction tend to be set in terms of the amount of pollution generated within the borders of a given region or nation. That is, under a "production accounting principle". However, in recent years there has been increased public and policy interest in the notion of a carbon footprint, or the amount of pollution generated globally to serve final consumption demand within a region or nation. That is, switching focus to a "consumption accounting principle". However, this paper argues that a potential issue arising from the increasing focus on consumption-based "carbon footprint" type measures is that while regional CO2 generation embodied in export production is attributed outside of the region (i.e. to the carbon footprints of other regions/nations), regional consumers are likely to benefit from such production. Moreover, where there is a geographical and supply chain gap between producers and final consumers, it may be difficult to identify precisely „whose‟ carbon footprint emissions should be allocated to.