Integrating emissions transfers into policy-making

Net emissions transfers via international trade from developing to developed countries have increased fourfold in the past two decades-from 0.4 GtCO(2) in 1990 to 1.6 GtCO(2) in 2008(1). Consumption of goods and services in developed countries is one of the main driving forces of those emissions transfers(2,3). Therefore several proposals have been made to assign the responsibility for those emissions to the beneficiary, that is, to the consumer(4-6). Although consumption-based analyses have become popular(7-9), few proposals have been made for integrating emissions transfers into actual policy making. This study advances and critically evaluates three potential policy options that could be integrated in the climate-policy framework of developed countries. An energy-economic model with global coverage is used for the analysis. I find that connecting emissions transfers to international offset responsibilities is the most promising option from an environmental and economic perspective and may provide another rationale for international climate finance. The two alternative policy options of adjusting domestic emissions targets in developed countries and of implementing carbon-related tariffs and export subsidies are found to be environmentally ineffective in the latter case and economically detrimental, especially for developing countries, in both cases.