AUTHOR: Antoine Oger
This brief is constructed around the findings of the Traded Emissions Tracker, developed by the European Climate Foundation (ECF) and the climate consultancy Matière that provides a visual overview of emissions linked to international trade from 2010 to 2023.
Today, over 20% of emissions are embodied in international trade. Since 1995, traded emissions have grown faster than global emissions themselves, reflecting the increasing proliferation of global supply chains. As countries take more ambitious measures to reduce their territorial emissions, they also need to wonder about their broader carbon footprint, an issue that sits at the intersection of climate mitigation, industrial decarbonisation and competitiveness.
Addressing imported emissions, whether through regulations, tariffs, or international cooperation, would send a strong message to governments. Countries hoping to attract investment through weaker environmental standards could find their carbon-intensive exports facing barriers in major consumer markets. Conversely, cooperation on ambitious climate standards would become increasingly attractive, and help countries maintain market access while accelerating global decarbonisation. At the level of individual sectors and industries, companies would need to adapt their production methods if they wish to retain access to economies that adopt measures to contain emissions. This would also discourage relocating in so-called “pollution havens”.
Ultimately, imported emissions are where climate policy meets trade policy. Addressing them means recognising that, in a globalised economy, achieving climate neutrality is not only about reducing emissions produced at home, but also about reducing the emissions embedded in what we consume. The topic needs careful unpacking and robust data for objective international discussions. The Traded Emissions Tracker is a contribution in this direction.
The Traded Emission Tracker
This brief is constructed around the findings of the Traded Emissions Tracker, a newly launched web platform developed by the European Climate Foundation (ECF) and the climate consultancy Matière that provides a visual overview of emissions linked to international trade covering the period from 2010 to 2023. Most climate statistics report emissions where they are physically released. Yet in a globalised economy, a large share of what we consume is produced abroad, generating emissions in the production country and not only the country of consumption. The tool’s purpose is to make this consumption-based perspective tangible and clear to inform trade and climate policy. The greenhouse gas (GHG) emissions embodied in international trade are presented visually, broken down by country, gas and sector. This includes the proportion of a country’s (or group of countries’) carbon footprint that is imported (emissions generated abroad for goods and services consumed domestically) and exported (emissions generated domestically for goods and services consumed abroad).
The tracker and its methodology can be accessed here: https://emissions.netzerotrade.org/
Key findings
✓ The EU’s overall GHG footprint (production emissions + imported emissions – exported emissions) ranks 4th globally after China, the US and India for a total of 4.0 billion tonnes of CO2 equivalent — 21% higher than emissions produced within its borders.
✓ The EU is the third most important emissions importer with 1.4 billion tonnes generated abroad. It also the third most important exporter,for a total of almost 20% of global emissions embodied in trade.
✓ Power generation and mining & fossil gas extractions are the largest contributors to the EU’s imported emissions.
✓ The European Climate Law and the EU Emissions Trading System are built almost entirely around territorial (production-based) emissions, leaving out the growing share of emissions embedded in imported goods.
✓ A credible EU climate framework for the post-2030 period should formally integrate consumption-based indicators, strengthen and extend border and due-diligence instruments, and pair these with demand-side and international cooperation measures.
Cover photo by Bent Van Aeken on Unplash
