UNDERSTANDING ENVIRONMENTAL RESPONSIBILITY OF CITIES AND EMISSIONS EMBODIED IN TRADE

Abstract

The attribution of greenhouse gas (GHG) emissions embedded in interregionally traded products to either production or consumption regions is a key issue to the understanding of the global environmental responsibility of metropolitan areas. In this paper we identify GHG emissions for which metropolitan areas assume responsibility by allocating emissions embodied in import and export products to regions of either consumption or production in the cases of three US metropolitan areas. The case studies show that embodied emissions in both export and import products accounted for 63–73% of total GHG emissions directly and indirectly pertaining to these metropolitan economies. These findings suggest that an accounting method that incorporates emissions embodied in product trade has relevance to the development of local policies that govern actions ranging from redirecting metropolitan development patterns toward low carbon emissions to promoting sustainable consumption behavior, particularly those involving the collaboration of cities.

Keywords:

• Environmental responsibility
• Multiregion input–output model
• Embodied greenhouse gas emissions
• Regional economy
• Trade

Notes

¹According to previous I–O modeling (Andrew and Forgie (2008); Erickson et al., 2012), the US embodied emissions from imported products were 17–33% of the total carbon footprint.

²The disregard of embodied GHG emissions in traded good and services does not necessarily result in underrepresentation of city's responsibility for GHG emissions. If a city's industry consists of energy-intensive sectors such as refinery and steel plant, its responsibility for GHG emissions may be overrepresented when a production-based approach applies.

³With respect to case areas of this study, the city- or metro-level inventories were commonly built on the method that tracks emissions sources within an administrative boundary (Bay Area Air Quality Management District, 2010; City of Seattle, 2011). One government-commissioned study entailed a consumption-based GHG inventory analysis (King County, 2012). According to the analysis for King County, per capita GHG emissions of the consumption-based GHG inventory (29 tons per person) were significantly higher than those of the geography-based GHG inventory (12.4 tons per person).

⁴The I–O modeling approach applied to other environmental issues such as virtual water (Guan and Hubacek, 2007; Lenzen, 2009; Daniels et al., 2011; Feng et al., 2012; Cazcarro et al., 2013) and hazardous waste (Court, 2012).

⁵Double counting should be avoided in the full responsibility in the empirical analysis. By simply combining the amount of GHG emissions calculated from the production-based and consumption-based principles, Type 1 emissions which are originated from regionally supplied and consumed products are counted twice. To avoid double counting, full environmental responsibility should be determined by separate calculations of Types 1– 3 emissions.

⁶Out-of-region in Figure 1 includes the rest of a nation and foreign countries.

⁷Because indirect emissions are included in territorial responsibility, the concept of territorial responsibility of this analysis is not equivalent to a conventional territorial approach that accounts for direct emissions released from local sources.

⁸A two-region —I–O framework can be generalized by simply extending a number of regions.

⁹The multiregion approach utilizes the commodity flow coefficients to separate intra- and interregional intermediate use and final demand. This approach relies on the proportionality assumption (Moses, 1955; OECD, 2006); that is, the trading pattern is uniform across industries within a region for a certain commodity. Although flow data that show industry-by-region origin and destination are ideal, they are unavailable for this analysis.

¹⁰^ denotes a diagonal matrix of a vector, T denotes the transposition of the matrix, and i denotes a summation vector in which all elements are 1.

¹¹Exports and imports include both domestic and foreign trade. International trade accounts for a relatively small portion; international exports comprise 9.5% of trade in Atlanta, 10.7% in San Francisco, and 18.6% in Seattle.

¹²IMPLAN is the source of personal income data for this comparison.

¹³Because the domestic technology assumption is used, I–O tables for the rest of the nation apply to estimate GHG emissions pertaining to import products.

¹⁴In our analysis, San Francisco metropolitan economy, which has more diverse manufacturing basis, is more self-reliable in the supply chain of manufacturing sectors compared to the other two metropolitan economies. The percentage of regionally supplied manufactured products is much higher in San Francisco metropolitan economy: 24.9% in Atlanta, 40.6% in San Francisco, and 29.3% in Seattle.

¹⁵Types of fuel are electricity, coal, petroleum-based fuel, natural gas, and by-product fuel and others.

¹⁶This research focused on GHG emissions generated from fuel consumption. It did not examine other sources of GHG emissions such as industrial process, agriculture, land use change, and waste.