Sovereign States in the Greenhouse: Does Jurisdiction Speak Against Consumption-Based Emissions Accounting?

ABSTRACT

The choice of greenhouse gas emissions accounting method is important because it affects the way climate burdens are allocated between states. This paper investigates the significance of state jurisdiction for this choice. It assesses three arguments from jurisdiction against consumption-based emissions accounting: the fairness argument from retrospective responsibility; the fairness argument from prospective responsibility; and the effectiveness argument. It argues that former two arguments fail since attributing emissions to importing states neither unfairly blames these states nor asks too much of them. However, the effectiveness argument provides a strong potential reason against consumption-based emissions accounting. To the extent jurisdictional control is needed to reduce some emissions, and production-based accounting incentivizes states to reduce these emissions, there is a reason of environmental effectiveness for sticking with production-based accounting.

KEYWORDS:

• Climate justice
• climate mitigation
• consumption-based accounting
• greenhouse gas emissions
• polluter pays principle

Acknowledgments

Previous versions of this paper were presented to audiences in Aarhus, Oslo, and Hamburg. I am especially grateful for comments from Jakob Elster, Robert Huseby, Fredrik D. Hjorthen, Sigurd Lindstad, Kim Angell, Olle Torpman, and two anonymous referees.

Disclosure Statement

No potential conflict of interest was reported by the author.

Correction Statement

This article has been republished with minor changes. These changes do not impact the academic content of the article.

Notes

1. Some prefer the term ‘territory-based accounting’ for this system of accounting and use ‘production-based accounting’ in a slightly different way (Barrett et al., 2013). See also the distinction between production, consumption, extraction, and income-based approaches in Steininger et al. (2016).

2. This argument is typically cast in terms of CB accounting preventing carbon leakage, the process whereby emissions relocate to countries where they are subject to less stringent regulation. A popular distinction is between strong (climate-policy induced) and weak (consumption induced) carbon leakage (Afionis et al., 2017, pp. 3–4). See also the distinction between the relocation, energy market, income, and technological spillover channels of carbon leakage discussed in Steininger et al. (2016).

3. For summaries of the arguments for and against CB accounting, see Steininger et al. (2014) and Afionis et al. (2017). Roser & Tomlinson (2014) offer an overview of the arguments for and against the closely related idea of border carbon adjustments. The political feasibility of CB accounting is discussed by Grasso and Roberts (2014) and Grasso (2017). For good discussion of the additional technical complexity introduced by CB accounting, see Peters (2008).

4. I use ‘state’ and ‘government’ interchangeably to describe the national political authority of a country, but for the sake of simplicity I shall mostly speak of ‘states’.

5. For consumer responsibility and ethical consumption generally, see, e.g. Hussain (2012) and Lawford-Smith (2015). For a well-known analysis of responsibility under global supply chains, see Young (2006).

6. For shared responsibility/costs models, see Lenzen et al. (2007).

7. Retrospective responsibility is always about causal responsibility and typically takes on the texture of moral responsibility in the sense that the retrospectively responsible actor is praise- or blameworthy for an outcome. Prospective responsibility is similar to what David Miller calls ‘remedial responsibility’, although it is not necessarily a special responsibility (Miller, 2007). For prospective responsibility, see Goodin (1985) and van der Poel et al. (2011).

8. However, different versions of the Polluter Pays Principle explain this in different ways. Read as a ‘fault-based’ principle, polluters should pay because this is just (Shue, 1993). Read as a forward-looking principle, polluters should pay to ensure that would-be polluters have an incentive not to pollute (de Sadeleer, 2002). For a philosophical discussion of the principle as applied to climate change, see Caney (2005) and Roser and Seidel (2017, pp. 118–129).

9. By saying that it is ‘formal’ right, I want to signal that this is not a normative claim: I am not suggesting that all states that have jurisdiction over their territory should have it. Moreover, the right is ‘exclusive’ in the sense that the right to make and enforce law is only held by the domestic state. The latter may seem too strong because, as one commentator notes, ‘the Hobbesian model of a single sovereign with a unified, complete jurisdiction has never existed’ (Valverde, 2014, p. 387). But since the argument from jurisdiction does not assume complete jurisdiction, I will gloss over the extent to which, if at all, the domestic state shares the right to make and enforce law with other political authorities.

10. Again, this is not to suggest that the amount of emissions flowing from the territory is fully under the control of the state. Individuals and other agents could choose to reduce emissions more than legally required, or emit more than legally permitted. The point is simply that the state is best placed to affect the amount of emissions in virtue of setting up legal proscriptions and prescriptions for other agents.

11. To be precise, Roser and Tomlinson argue that the Polluter Pays Principle cares about agent responsibility (Vallentyne, 2008), which is similar to the perhaps better-known concept of outcome responsibility (Miller, 2007, pp. 86–97). However, they think that the question of states’ responsibility for emissions essentially boils down to causal contribution since producers and consumers are typically agent responsible for their involvement in production-consumption sequences (Roser & Tomlinson, 2014, p. 237).

12. Mackie expressed this in terms of causal statements presupposing a ‘causal field’. See also Miller (2007, p. 87).

13. It does not follow from this that they are equally causally responsible. It is possible to argue that A and B are jointly responsible for an outcome yet argue that A is more responsible than B. Indeed, this is normal in many cases of pollution, such as when two cities together pollute a lake but one city releases more pollutants than the other. This qualification does not affect my analysis, however, as a degree of retrospective responsibility on the side of consumers is enough to question the fairness argument from retrospective responsibility.

14. Border carbon adjustments (BCAs) are policies that ‘focus on applying climate policy to imports and exports and thereby adjusting the differential costs for consumers and producers in countries with different climate policies. In general, BCAs include three types of measures: (i) border taxes; (ii) mandatory emissions allowance purchase by importers; and (iii) product standards for embodied carbon.’ (Roser & Tomlinson, 2014, p. 228; cf. Böhringer et al., 2012).

15. A further question is whether ascribing prospective responsibility in this way would also be more efficient, meaning that tasks are performed at lower cost. For the sake of brevity, I will disregard this aspect, but since economically efficient mitigation probably also means greater emission cuts, we should not overplay the distinction between efficiency and effectiveness here.

16. For an exploration of the tension between fairness among burden takers and effectiveness, see Caney (2014). An argument from fairness for CB accounting is that pricing imports in accordance with the domestic carbon price ensures that states with more ambitious climate targets are not put at a disadvantage (Roser & Tomlinson, 2014).

17. This conclusion is worded in a simpler way than P1 in the previous argument but the meaning is the same.

18. Davis and Caldeira (2010) report that approximately 23% of global carbon dioxide emissions were traded internationally.

19. For a more nuanced taxonomy over different kinds of regulation, see Coria and Sterner (2011).

20. A special difficulty here is posed by fossil fuel exporters since countries that export fuels burnt elsewhere will not be attributed with these emissions regardless of whether we use PB or CB accounting, at least as long as the emissions go into goods that are not consumed in the fossil fuel exporting countries. For this difficulty, see Moss (2016).

21. A well-known statement of this view is Tietenberg (1991). For summaries of the debate, see Goulder and Parry (2008); Baldwin et al. (20112011); and Coria and Sterner (2011).

22. Price inelasticity is also a problem for PB accounting since a state will be unable to reduce their territorial emissions by introducing, say, a carbon tax if domestic consumers are insensitive to price increases for domestically produced goods. But the point is that the domestic state has access to command-and-control type regulation in the territory over which it has jurisdiction, and such regulation is not (as) plagued by price inelasticity.

23. For studies that investigate the effects of consumption-based emissions policies, see, e.g. Steckel et al. (2010); Jakob et al. (2014); Springmann (2014); Steininger et al. (2014); Lininger (2015); and Peters et al. (2016, p. 52). It is worth pointing out that these studies generally do not assess the effects of adopting CB emissions accounting as a global standard. Moreover, they are based on modelling since actual policy experience does not exist.

Additional information

Funding

The research was supported by the Swedish Research Council (grant number 2015-01346) and Riksbankens Jubileumsfond (grant number M17-0372:1). I gratefully acknowledge their financial support