We import even more carbon than we think.
It is now becoming fairly well understood that production based national emissions metrics and targets, such as the UK's, fail to take account of emissions from net imports of goods and services. Some of us are getting to grips with the idea that national production based targets fail to track our movement towards a low carbon economy and provide a perverse incentive to import more of our goods. Encouragingly, the Commons Select Committee on Climate Change is having a review of the case for consumption based accounting.
Many of us now understand that when we import goods we currently shift the embodied carbon off the UK's books. We also know that there is a good chance that we are multiplying it by having the production done using less energy efficient industry, powered by more carbon intensive energy. The average dollar spent on primary energy in China results in three times the carbon compared to in the UK. That is partly because the energy mix causes more carbon per kilowatt hour but mainly because Chinese coal is such a cheap energy source. At Small World, we've been digging into this to estimate the embodied carbon from the burning of fossil fuel per unit of monetary output from different industries in different countries. We've been using OECD input-output tables to trace the direct and indirect expenditure on mined energy products and combining that with statistics on energy prices and fuel mixes to arrive at our estimates. The results are startling, even though some context is essential.
Two Headline results: Per dollar of output from the textiles industries in China we estimate that there is more than ten times the embodied carbon from fossil fuels comparred to the figure for the UK textiles industry. For the Iron and Steel industry the ratio is just under ten.
Essentail Context:
1) The product mixes are not the same in the two countries. If we shifted all our textile imports to UK production, the carbon intensity of our textile industry would increase somewhat.
2) Like for like prices are not the same - which is why we buy so much clothing from China. (Two contributing factors are theartificial devaluation of Chinese currency and that in Chinese textiles industry there is only one third of the expenditure on employee remuneration per £ of output that there is in the UK industry)
3) These are draft results, and although we have kicked them about quite a bit and sense checked them they are not formerly peer reviewed.
What this means Consumption based metrics that take proper account of the different carbon intesities of production around the world are a must-have for the UK. These are likely to confirm that we are a very long way indeed from decoupling economic growth from carbon. There looks to be a powerful environmental case for having more of our production carried out more locally.

