Measuring progress towards carbon reduction in the UK

The UK Climate Change Bill proposes to establish legally binding targets for a 60% reduction in carbon dioxide emissions by 2050. This paper discusses the challenges posed by measuring progress towards this target. It takes as a premise that the conventional production-based accounting framework, enshrined in the UNFCCC emissions accounting guidelines, is inappropriate for this task because it fails to account for the carbon ‘traded’ across the UK national boundary. Accordingly, it sets out a consumption-based accounting framework – using a two-region Environmental Input–Output (EIO) model – which could in principle measure progress in reducing the emissions attributable to final consumers in the UK. It illustrates the use of this framework to measure the reduction in carbon dioxide achieved by the UK between 1990 (the Kyoto base year) and the year 2004 and compares this against the production perspective. The results indicate that any progress towards the UK's carbon reduction targets (visible under a production perspective) disappears completely when viewed from a consumption perspective. But the robustness of this conclusion depends critically on the accuracy of underlying economic and environmental datasets as well as specific assumptions concerning imports. By analysing the consistency of UK Input–Output data, we conclude that EIO is still some way from being able to answer the critical question of the carbon trade balance for the UK. In these circumstances, measuring real progress towards carbon reduction in the UK remains elusive.