Input-output and life-cycle emissions accounting: applications in the real world

A considerable body of academic literature has emerged that addresses methods for consumption-based accounting of greenhouse gas (GHG) emissions as opposed to the territorial approach used under the United Nations Framework Convention on Climate Change (UNFCCC). The consumption-based approach attributes emissions to consumers of final goods and services by accounting for the GHG emissions 'embedded' in raw materials and intermediate goods and services. Many authors have advocated the wider adoption of a consumption-based approach. This article does not take one side or another in the consumption-based versus territorial debate. Instead, it explores the extent to which consumption-based thinking has already found practical application by companies and public authorities and assesses the potential for further adoption. The methodologies underlying consumption-based approaches are critically reviewed to note criteria such as accuracy and the timeliness of data generation, which suggest the potential for practical application. A typology of applications is then developed and each category of application is systematically explored citing real-world examples where possible. The article concludes with a discussion of the potential for the wider application of consumption-based approaches and identifies further research needs. Policy relevance Consumption-based approaches to accounting for GHG emissions are gradually being adopted in the policy domain, albeit in a haphazard way. This article (1) identifies the strengths and weaknesses associated with top-down input-output approaches and bottom-up life cycle assessment approaches to consumption-based accounting in terms of criteria such as accuracy and timeliness of data generation; (2) provides a comprehensive review of actual and proposed applications to date; (3) constructs a taxonomy of applications drawing on the analysis of strengths and weaknesses; and (4) considers the prospects for further application. The article will help policy makers and policy analysts to assess the feasibility and desirability of future applications of consumption-based approaches and address implementation barriers.