Greenhouse gas emissions from a consumption perspective

Greenhouse gas emissions from a consumption perspective

Key results

• Since 1995, Canada’s production-based GHG emissions have been higher than its consumption-based emissions, making the country a net exporter of GHG emissions over that period
• From 1995 to 2011, consumption-based emissions increased steadily except for a dip in 2009 following the 2008 financial crisis. Since 2011, consumption-based emissions have decreased overall

Production- and consumption-based greenhouse gas emissions from Canada, 1995 to 2020

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 most recent official accounting of production-based greenhouse gas emissions. For more information see the data sources and methods section.
Source: Organisation for Economic Co-Operation and Development (2024) Greenhouse Gas emissions Footprints Indicators.

Consumption-based emissions are directly influenced by 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 produced using hydroelectricity) and the volume of goods consumed. From 1995 to 2020, the difference between production- and consumption-based emissions in Canada has varied considerably, with the absolute difference varying between 3.4% and 22.6%.

Throughout the period from 1995 to 2020, Canada has remained a net exporter of GHGs, meaning that consumption-based emissions have been lower than production-based emissions. In the early 2000s consumption-based emissions increased faster than production-based emissions. As a result, net GHG exports decreased until the 2008-2009 global financial crisis during which consumption-based emissions decreased. After a short rebound following the financial crisis, consumption-based emissions began to decrease. This is likely the result of a number of factors, including the expansion of renewable energy that began in the early 2000s and continued throughout the 2010s, decrease in coal usage, improved waste diversion practices, implementation of more energy efficient technologies such as heat pumps and the failure of the manufacturing sector to fully recover following the 2008 global financial crisis.^{Footnote 3}  There was then a sharp decrease in consumption-based emissions in 2020 coinciding with the start of the global COVID-19 pandemic.

Comparison of GHG emissions embodied in international trade

Key results

• Over the 1995 to 2020 period, China and the Russian Federation were the 2 most important net exporters of GHG emissions
• Canada and India were also net GHG emissions exporters over the same period
• During the same period, the United States, the European Union and other member countries of the Organisation for Economic Co-Operation and Development were net importers of GHG emissions

Difference between production- and consumption-based emissions from selected countries and regions, 1995 to 2020

How this indicator was calculated

Note: OECD = Organisation for Economic Co-operation and Development. (27) refers to the 27 member states of the European Union as of May 2024. Countries in the "Other OECD" group include Australia, Chile, Colombia, Iceland, Israel, Japan, South Korea, Mexico, New Zealand, Norway, Switzerland, Türkiye and United Kingdom. 
Source: Organisation for Economic Co-Operation and Development (2024) Greenhouse Gas emissions Footprints Indicators.

Since 2003, the largest net exporter of GHG emissions was China. The United States was the largest net importer of emissions with the exception of the period between 2009 and 2014 which coincides with the aftermath of the 2008 financial crisis. Following the crisis, consumption-based emissions in the United States decreased faster than production-based emissions, resulting in GHG emissions imports decreasing until 2014, at which point consumption-based emissions began to once again increase faster than production-based emissions, although the rate of increase is much lower than the pre-financial crisis rate. During this period of falling consumption, the United Kingdom, which follows a similar trend to the United States albeit offset by roughly two years, was intermittently the largest net importer. This could be owed to the United Kingdom experiencing the 2008 financial crisis with a slight delay due to it not experiencing the specific housing crisis that gave way to the larger global financial crisis. China, in contrast experienced a decrease in GHG exports shortly after the financial crisis. This led to it nearly being surpassed in GHG exports by Russia which has been an exporter of emissions since 2000.

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

About the indicator

What the indicator measures

The Greenhouse gas emissions from a consumption perspective indicator provides a view of the impact of Canada's consumption of goods and services, regardless of where they are produced, on the levels of greenhouse gases (GHGs) released into the atmosphere. It accounts for GHG emissions associated with products and services consumed in Canada and produced either domestically or abroad. The indicator also compares Canada's production- and consumption-based GHG emissions with a selection of other countries/regions.

Why this indicator is important

The release of greenhouse gases (GHGs) and their increasing concentrations in the atmosphere are the main drivers of climate change. The most common method of accounting for GHG emissions is to assign responsibility 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 Canada's official National inventory report: greenhouse gas sources and sinks in Canada.

Production-based emissions accounting does not take into account the emissions associated with products imported for consumption in Canada. On the other hand, it includes emissions associated with the production of products and services that are exported, responding to demand abroad. The Greenhouse gas 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 climate change. Reducing production in a country and purchasing more products abroad may reduce production-based emissions domestically, but the effect on worldwide emissions is the same, unless the production taking place in other countries is more or less carbon-intensive than domestic production would have been. 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 2040.

The Greenhouse gas concentrations indicator presents atmospheric concentrations as measured from sites in Canada and at a global scale for 2 greenhouse gases: carbon dioxide and methane.

Data sources and methods

Data sources

The data were retrieved in November 2024 from the July 2024 version of the Organisation for Economic Co-operation and Development’s Greenhouse Gas emissions Footprints Indicators.

Methods

The consumption-based greenhouse gas (GHG) emissions presented in the indicator were developed by the Organisation for Economic Co-operation and Development. The Organisation for Economic Co-operation and Development combined data from the 2023 editions of its inter-country input-output tables and its Greenhouse gas footprint indicators estimates. This approach relies on input-output tables from national accounts coupled with national emissions data allocated to industries. The approach includes emissions from industrial and agricultural processes used to create and use products and services (including those of all products and services used as intermediate inputs) along with emissions included in the distribution of a product or service.

Recent changes

In the 2025 release of this indicator, non-CO₂ emissions are now also considered instead of a sole focus on CO₂ emissions due to fuel combustion. OECD also changed its methodology from previous iterations relying primarily on Air Emissions Accounts (AEAs) and using other sources such as the International Energy Agency estimates of CO₂ emissions from fuel combustion when AEAs are not available for use in a given country at a given time.

Caveats and limitations

The greenhouse gas emissions estimates presented in the indicator are partially based on estimates from other data sources. These data sources produce estimates that differ from emissions reported in AEAs which are based on emissions reported in National Inventories of countries.

Resources

References

Boothe P, Chang , and Moloney D (2020) Canada’s Manufacturing Sector: A Decade in Review (PDF; 5.15 MB). Trillium Network for Advanced Manufacturing. Retrieved on November 25, 2024.

International Energy Agency (2021) CO₂ emissions from fuel combustion - Database documentation (2021 edition) (PDF; 1.23 MB). Retrieved on November 8, 2024.

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 November 8, 2024.

Organisation for Economic Co-operation and Development (2024) Greenhouse Gas emissions Footprints Indicators. Retrieved on November 8, 2024.

Organisation for Economic Co-operation and Development (2024) Measuring Greenhouse Gas Footprints in Global Production Networks. Retrieved November 8, 2024.

Organisation for Economic Co-operation and Development (2024) Towards global SEEA Air Emission Accounts: Description and evaluation of the OECD methodology to estimate SEEA Air Emission Accounts for CO₂, CH₄ and N₂O in Annex-I countries to the UNFCCC (PDF; 1.88 MB). Retrieved November 8, 2024.

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 November 8, 2024.

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 November 8, 2024.

Yamano N and Ahmad N (2006) The OECD input-output database: 2006 edition. Organisation for Economic Co-operation and Development. Retrieved November 8, 2024.

Related information

Canada's action on climate change

Environment and Climate Change Canada - Climate change

Environment and Climate Change Canada (2024) National inventory report: greenhouse gas sources and sinks in Canada.

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.