CO2 emissions embodied in international trade and domestic final demand
Methodology and results using the OECD Inter-Country Input-Output Database
This paper describes the sources and methods used to estimate carbon emissions embodied
in final demand and international gross trade for 65 economies over the period 2005-2015.
Earlier OECD analyses of carbon footprints, accounting for global production networks,
helped raise awareness of divergences between territorial and resident principles,
and between production-based and consumption-based carbon emissions. Understanding
the differences in these measures is important for governments to better understand
and address greenhouse gas mitigation options. Thus, a new refined methodology was
applied to allocate territorial emissions to production-based emissions (industries
and households) using OECD Inter-Country Input-Output tables and International Energy
Agency (IEA) CO2 emissions from fuel combustion statistics. In particular, this methodology
introduces: 1) explicit distinctions between territorial and resident principles,
economic output and final demand-based emissions and emissions embodied in gross imports
and exports; 2) estimates by major fuel combustion sources; and 3) fuel purchases
by non-resident industries and households.