Greenhouse gas emissions can be accounted for in different ways. The UK's territorial emissions account for those that are physically emitted from chimneys and exhausts in the UK. Driving down the UK's territorial emissions has been a main policy driver for the Department of Energy and Climate Change (DECC).
The UK's consumption-based emissions take into account the emissions generated in another country during the manufacture of goods (or services) that are then exported and "consumed" in the UK. Data on the UK's consumption-based emissions is gathered by the Department for Environment, Food and Rural Affairs (Defra).
There is a clear divergence between the UK's territorial emissions and its consumption-based emissions. The UK's territorial emissions have been going down, while the UK's consumption-based emissions, overall, have been going up. The rate at which the UK's consumption-based emissions have increased have far offset any emissions savings from the decrease in territorial emissions. This means that the UK is contributing to a net increase in global emissions.
We conclude that there are two main reasons for the fall in the UK's territorial emissions, neither of which were a result of the Government's climate policy: the switch from coal to gas-fired electricity generation in the 1990s, which was driven by privatisation of the electricity sector; and the shift in manufacturing industries away from the UK in response to the pressures of globalised markets. The latter led to an increase in consumption-emissions as the UK imported goods it previously manufactured domestically. However, the rate at which the UK's consumption-based emissions are increasing is also indicative of increasing levels of consumption.
Local authorities around the UK have used assessments of their consumption-based emissions to explain to residents how their behaviourin terms of what they "consume", whether that be an imported tomato or computer, or a flightis connected to emissions of greenhouse gases. Consideration of consumption-based emissions has allowed these local authorities to generate new policy options targeting consumption behaviour.
DECC should explore the options for incorporating consumption-based emissions data into their policy making process, alongside data on territorial emissions. Considering both sets of data together will give a more complete picture of the UK's impact on the climate, and can be used to inform people of the impacts of their own behaviour on global emissions. The Government's independent climate adviser, the Committee on Climate Change, has told us that it would welcome the opportunity to explore the implications that consumption-based emissions accounting might have for the UK's carbon budgets. The Government should take them up on this offer.
If the Government wishes the UK to continue its lead on climate policy it must recognise the growth in the UK's consumption-based emissions. The Committee is not proposing that consumption-based emissions become the primary driver of policy at DECC. Neither is the Committee suggesting that consumption-based emissions should replace territorial emissions as the basis for negotiations under the United Nations Framework Convention on Climate Change (UNFCCC). However, an acknowledgement that the UK's consumption is driving up emissions in other countries could increase the Government's leverage over those emissions. The UK has to address its consumption if it is to make an effective contribution to a global reduction of greenhouse gas emissions.