Carbon dioxide emissions from a consumption perspective

Carbon dioxide emissions from a consumption perspective

Key results

• Between 2006 and 2014, Canada's consumption-based CO₂ emissions were higher than its production-based emissions^{Footnote 2} , making the country a net importer of CO₂ emissions during that period
• In 2015, Canada was a net exporter of CO₂ with production-based CO₂ emissions reaching 556 megatonnes, or 1.5% above its consumption-based emissions

Production- and consumption-based carbon dioxide emissions from fuel combustion, Canada, 2005 to 2015

How this indicator was calculated

Note: Values for production- and consumption-based emissions presented in this indicator are based on the Organisation for Economic Co-operation and Development data. These numbers may differ from Canada's official accounting of production-based greenhouse gas emissions.
Source: Organisation for Economic Co-operation and Development (2019) Trade in embodied CO₂ database (TECO2).

Consumption-based emissions are directly influenced by, among others, the volume of imports, the mix of energy sources used to produce the goods consumed (for example, goods produced through a process powered by coal plants are more emissions-intensive than those using hydroelectricity) and the volume of goods consumed. From 2005 to 2015, the difference between production- and consumption-based emissions has shown little variations, with an absolute difference varying between 0.5% and 2.9%.

In 2006, Canada switched from being a net exporter to a net importer of CO₂ emissions country, meaning that the consumption-based emissions were higher than the production-based emissions. Following the 2008-2009 global financial crisis, CO₂ emissions (both production- and consumption-based) reduced significantly to a record-low in 2009. However, the CO₂ emissions increased again in 2010. In 2015, Canada switched back to a net exporter of CO₂ emissions to other countries, most likely because of declining emissions intensity in China, which is one of Canada's largest trading partners. 

Comparison of carbon dioxide emissions embodied in international trade

Key results

• Over the 2005 to 2015 period, China and the Russian Federation were net exporters of CO₂ emissions
• Over the same period, the United States, the European Union and other countries who are members of the Organisation for Economic Co-operation and Development were net CO₂ importers for the whole period, except Canada which was a net exporter in 2005 and 2015
• Canada is the country with the most stable CO₂ emissions path over the period from 2005 to 2015 

Difference between production- and consumption-based emissions from fuel combustion, selected countries and regions, 2005 to 2015

How this indicator was calculated

Note: OECD = Organisation for Economic Co-operation and Development. Values for production- and consumption-based emissions presented in this indicator differ from Canada's official accounting of production-based greenhouse gas emissions. (27) refers to the 27 member states of the European Union as of May 2020. The OECD's inter-country input-output system includes discrepancies in the trade data. In this table, emissions allocated to these inter-country input-output system discrepancies are included in the "rest of the world" region. This ensures that global CO₂ production equals global CO₂ consumption. Countries in the "Other OECD" group include Australia, Chile, Colombia, Iceland, Israel, Japan, Korea, Mexico, New Zealand, Norway, Switzerland, Turkey and United Kingdom. 
Source: Organisation for Economic Co-operation and Development (2019) Trade in embodied CO₂ database (TECO2).

In 2015, the largest exporter of CO₂ emissions was China whereas the United States was the largest importer of CO₂ emissions. While both production and consumption of emissions have fallen in the United States since 2005, there has been an increase in China. China has the highest absolute emissions from both a consumption and a production perspective.

Canada's economy represents 2% of the world economy and less than 2% of the world's greenhouse gas emissions. As a result, Canada represents a relatively small portion of CO₂ emissions embodied in global trade.

About the indicators

What the indicators measure

The Carbon dioxide emissions from a consumption perspective indicators provide a view of the impact of Canada's consumption of goods and services, regardless of where they are produced, on the levels of carbon dioxide (CO₂) released into the atmosphere. It is accounting for CO₂ emissions resulting from fuel combustion associated with products and services consumed in Canada and produced either domestically or abroad. The indicator also compares Canada's production- and consumption-based CO₂ emissions with 6 other countries/regions.

Why these indicators are important

The release of greenhouse gases (GHGs) and their increasing concentrations in the atmosphere have been the main drivers of climate change over the last decades and are having significant impacts on the environment, human health and the economy. Carbon dioxide (CO₂) has been the dominant greenhouse gas emitted by human activity. The indicators focus on the CO₂ emissions resulting from fuel combustion since it is considered the primary source of CO₂.

The most common method of accounting for CO₂ emissions, is to assign responsibility for the emissions to the emitting entity, sector or region. This approach (often referred to as production-based emissions accounting) is used by Canada and other countries to report their national GHG emissions inventory to the United Nations Framework Convention on Climate Change. It is also the approach underlying the national GHG indicators in the Canadian environmental sustainability indicators program, which are based on Canada's official National inventory report: greenhouse gas sources and sinks in Canada.

Production-based emissions account for emissions physically occurring in Canada. They do not take into account the emissions associated with products imported and, as a consequence, do not include all that is consumed in Canada. On the other hand, it includes emissions associated with the production of products and services being produced in Canada but exported, responding to a demand abroad. The Carbon dioxide emissions from a consumption perspective indicators (Consumption-based emissions) account for emissions associated with products and services consumed in Canada and produced either domestically or abroad.

The location where GHG emissions originate has little or no impact on the resulting influence on climate change. For example, reducing production in a country and purchasing more products abroad may reduce emissions domestically, but the effect on worldwide emissions depends on whether the production taking place in other countries is more or less carbon-intensive than the domestic production. Focusing on consumption- based emissions accounting can support climate change policy by calling attention to the influence of household, business, and government choices on emissions.

Related indicators

The Greenhouse gas emissions indicators report trends in total anthropogenic (human-made) GHG emissions at the national level, per person and per unit gross domestic product, by province and territory and by economic sector.

The Greenhouse gas emissions from large facilities indicator reports GHG emissions from the largest GHG emitters in Canada (industrial and other types of facilities).

The Global greenhouse gas emissions indicator provides a global perspective on Canada's share of global GHG emissions.

The Greenhouse gas emissions projections indicator provides an overview of Canada's projected GHG emissions up to 2030.

Data sources and methods

Data sources

The data were retrieved in April 2020 from the March 2019 version of the Organisation for Economic Co-operation and Development's Carbon dioxide emissions embodied in international trade (TECO2) database.

Methods

The consumption-based carbon dioxide (CO₂) emissions presented in the indicator were developed by the Organisation for Economic Co-operation and Development. The Organisation for Economic Co-operation and Development used a Multi-Regional Input-Output model. This approach relies on input-output tables from national accounts coupled with national emissions data allocated to industries. The approach focuses on the emissions from fuel combustion generated to supply and use a specific product or service (including those of all products and services used as intermediate inputs), but does not include emissions associated with disposal.

To develop its data set, the Organisation for Economic Co-operation and Development combined data from the 2018 editions of its inter-country input-output tables and the International Energy Agency's CO₂ emissions from fuel combustion estimates.

Recent changes

In the 2019 release of the Carbon dioxide (CO₂) emissions embodied in international trade (TECO2) database, emissions from fuels used for international aviation and maritime transport (that is, aviation and marine bunkers) are considered.

The International Energy Agency estimates of CO₂ emissions from fuel combustion are now based on the 2006 IPCC Guidelines. This is in contrast to the estimates presented in the TECO2's 2015 edition which were based on the Revised 1996 IPCC Guidelines.

The 2018 edition of the Organisation for Economic Co-operation and Development's Inter-country input-output (ICIO) tables uses the International Standard Industrial Classification Revision 4, instead of the Revision 3 version as for the previous editions. Also, the data available now cover the period from 2005 to 2015. TECO2's 2015 edition provided data from 1995 to 2011.

Since February 1, 2020, the United Kingdom is no longer a member country of the European Union. To reflect this new situation, the United Kingdom's emissions are now attributed to the "Other OECD countries" region. So are Colombia's emissions which is a member of the OECD since April 28, 2020.

Caveats and limitations

The carbon dioxide (CO₂) emissions estimates presented in the indicator are based on CO₂ emissions from fuel combustion estimates calculated by the International Energy Agency. As such, they vary from those of other indicators presented in the current set of national greenhouse gas (GHG) indicators from the Canadian environmental sustainability indicators program, which are based on Canada's official National inventory report: greenhouse gas sources and sinks in Canada.

Resources

References

International Energy Agency (2019) CO₂ emissions from fuel combustion (2018 edition). Retrieved on April 29, 2020.

International Energy Agency (2019) CO₂ emissions from fuel combustion - Database documentation (2019 edition) (PDF; 834 KB). Retrieved on April 29, 2020.

Nakano S, Okamura A, Sakurai N, Suzuki M, Tojo Y and Yamano N (2009) The measurement of CO₂ embodiments in international trade: evidence from the harmonised input-output and bilateral trade database. Organisation for Economic Co-operation and Development. Retrieved on April 29, 2020.

Organisation for Economic Co-operation and Development (2019) Carbon dioxide emissions embodied in international trade. Retrieved on April 29, 2020.

Organisation for Economic Co-operation and Development (2019) Trade in embodied CO₂ database (TECO2). Retrieved on April 29, 2020.

Organisation for Economic Co-operation and Development and World Trade Organization (2012) Trade in value-added: concepts, methodologies and challenges (PDF; 973 KB). Retrieved on April 29, 2020.

Victor P A and Dolter B (2013) Demand-Based GHG Accounting. Environment and Climate Change Canada.

Victor P A and Dolter B (2016) Casting a long shadow: Demand-based accounting of Canada's greenhouse gas emissions responsibility. Environment and Climate Change Canada.

Wiebe K S and Yamano N (2015) Estimating consumption-based CO₂ emissions using the OECD ICIO 2015. Organisation for Economic Co-operation and Development. Retrieved on April 29, 2020.

Yamano N and Ahmad N (2006) The OECD input-output database: 2006 edition. Organisation for Economic Co-operation and Development. Retrieved on April 29, 2020.

Related information

Canada's action on climate change

Greenhouse gas emissions: drivers and impacts

Environment and Climate Change Canada - Climate change

Environment and Climate Change Canada (2020) National inventory report: greenhouse gas sources and sinks in Canada.

Intergovernmental Panel on Climate Change (1996) Revised 1996 IPCC guidelines for national greenhouse gas inventories.

Intergovernmental Panel on Climate Change (2006) 2006 IPCC guidelines for national greenhouse gas Inventories.

Miller R E and Blair P D (2009) Input-output analysis: Foundations and extensions (second edition).

United Nation Framework Convention on Climate Change (2014) Reporting guidelines on annual inventories for Parties included in Annex I to the Convention.

Wiedmann T (2009) A review of recent multi-region input-output models used for consumption-based emission and resource accounting. Ecological Economics 69(2):211-222.