An econometrical analysis of final consumption and carbon emissions responsibilities

FAN Gang1 , SU Ming2  and CAO Jing3

1The National Economic Research Institute (NERI)
2National School of Development, Peking University

3School of Economics and Management, Tsinghua University

Abstract:

The deepening of international specialization and the variation among nations’ consumption patterns have become focal issues in allocating carbon emissions responsibilities among nations in climate negotiation. This paper represents an attempt to measure nations’ carbon emissions responsibilities based on their final consumption and to calculate each nation’s quantity and share of greenhouse gas emissions based on final consumption using a dynamic computable general equilibrium (CGE) model. An econometrical analysis finds that consumption rather than production is mainly to blame for fast-growing greenhouse gas emissions and worsening climate change trends. Global warming has been exacerbated due to developed countries’ global resource allocation in a bid to maintain their high consumption levels. Therefore, it is more fair and equitable to assign emissions reduction responsibilities among nations based on their share of consumption-based emissions.

Key words: Climate change, consumption-based emissions

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