The chapter discusses the implications that a reduction in the world’s carbon footprint will have... more The chapter discusses the implications that a reduction in the world’s carbon footprint will have for global employment. The results show some of the unforeseen consequences for the developing world if the developed world decides to reduce its carbon footprint by reducing its imports. The chapter introduces us to the labour productivity of carbon, which represents the amount of labour associated with every kilogram of CO2 released during production of goods and services.
During the last decades, the UK economy has increasingly relied on foreign markets to fulfil its ... more During the last decades, the UK economy has increasingly relied on foreign markets to fulfil its material needs, becoming a net importer of both emissions and employment. While the emissions footprint reflects the pressure that consumption exerts on the planet's climate, the labour footprint represents the employment that is created across the globe associated with the demand for products and services. This paper has a twofold objective. First, it focuses on analysing the behaviour over time, drivers, and sectoral and regional composition of both UK's footprints. Second, it explores the relationship between both measures by estimating the elasticity between the growth of emissions and employment embodied in imports. The results show that around half of the emissions associated with UK consumption were generated outside its borders, while only 40% of total employment was domestic. This has important policy implications. Reducing UK's imports can contribute to cut both its footprints, generating less emissions abroad and more employment opportunities within. However, cutting imports is challenging, since this would require a lengthy and difficult process of structural transformation. The UK could contribute to curb emissions outside its borders, while safeguarding development overseas, by offering increased support to emission-intensive trade partners in the form of technology transfer and financial aid.
With no globally comprehensive agreement until 2020, there is a serious concern that the environm... more With no globally comprehensive agreement until 2020, there is a serious concern that the environmental effectiveness of climate policy in developed will be compromised. This report explores how to extend the responsibility of developed countries to minimise the effects of emission leakage in the absence of a global agreement between 2012 and 2020, focusing on the application of Border Carbon Adjustments (BCA) within a system of consumption-based GHG accounting.
We estimate the volume of emissions that could be potentially taxed by BCAs. We study the effects... more We estimate the volume of emissions that could be potentially taxed by BCAs. We study the effects of trade provisions and country and sectoral coverage on BCAs. Trade provisions can significantly reduce the scope and effectiveness of BCAs. Best available technology and exclusion of electricity reduce tariffs considerably. BCAs are not optimal policy tools to address carbon leakage concerns.
The relationship between human health and well-being, energy use and carbon emissions is a foremo... more The relationship between human health and well-being, energy use and carbon emissions is a foremost concern in sustainable development. If past advances in well-being have been accomplished only through increases in energy use, there may be significant trade-offs between achieving universal human development and mitigating climate change. We test the explanatory power of economic, dietary and modern energy factors in accounting for past improvements in life expectancy, using a simple novel method, functional dynamic decomposition. We elucidate the paradox that a strong correlation between emissions and human development at one point in time does not imply that their dynamics are coupled in the long term. Increases in primary energy and carbon emissions can account for only a quarter of improvements in life expectancy, but are closely tied to growth in income. Facing this carbon-development paradox requires prioritizing human well-being over economic growth.
Abstract For the period since 2011, the UK has been bound by European Union (EU) legislation rega... more Abstract For the period since 2011, the UK has been bound by European Union (EU) legislation regarding energy reduction targets to 2020. As of 2019, the UK had reduced its final energy use by 18% against a baseline projection to 2020, on track to meet its target of 18%. Whilst the rest of the EU-27 now set their own energy reduction targets to 2030, upon leaving the EU via Brexit, the UK is now free to choose its own energy targets. But what should the energy target be for 2030, and what are the socio-macroeconomic impacts and policy implications? To address this, we use two econometric energy-economy models to assess three different levels of energy reduction target, with 27%, 33% and 40% reduction in 2030 versus the baseline model projections. We find the strictest (40%) energy reduction target could deliver the largest economic and employment benefits. However, careful attention to policies are required, to ensure improvements to overall economy-wide energy efficiency whilst minimising rebound. Demand-side policies of serious scale within an ‘avoid-shift-improve’ framework are required, including massive building retrofits, significant improvements to industrial energy efficiency, switching to low energy transport modes, and moving away from meat-based diets.
The Strathprints institutional repository (https://strathprints.strath.ac.uk) is a digital archiv... more The Strathprints institutional repository (https://strathprints.strath.ac.uk) is a digital archive of University of Strathclyde research outputs. It has been developed to disseminate open access research outputs, expose data about those outputs, and enable the management and persistent access to Strathclyde's intellectual output.
The chapter discusses the implications that a reduction in the world’s carbon footprint will have... more The chapter discusses the implications that a reduction in the world’s carbon footprint will have for global employment. The results show some of the unforeseen consequences for the developing world if the developed world decides to reduce its carbon footprint by reducing its imports. The chapter introduces us to the labour productivity of carbon, which represents the amount of labour associated with every kilogram of CO2 released during production of goods and services.
Development of energy policy is often informed by economic considerations via aggregate productio... more Development of energy policy is often informed by economic considerations via aggregate production functions (APFs). We identify a theory-to-policy process involving APFs comprised of six steps: (1) selecting a theoretical energy-economy framework; (2) formulating modeling approaches; (3) econometrically fitting an APF to historical economic and energy data; (4) comparing and evaluating modeling approaches; (5) interpreting the economy; and (6) formulating energy and economic policy. We find that choices made in Steps 1-4 can lead to very different interpretations of the economy (Step 5) and policies (Step 6). To investigate these effects, we use empirical data (Portugal and UK) and the Constant Elasticity of Substitution (CES) APF to evaluate four modeling choices: (a) rejecting (or not) the cost-share principle; (b) including (or not) energy; (c) quality-adjusting (or not) factors of production; and (d) CES nesting structure. Thereafter, we discuss two revealing examples for which different upstream modeling choices lead to very different policies. In the first example, the (kl)e nesting structure implies significant investment in energy, while other nesting structures suggest otherwise. In the second example, unadjusted factors of production suggest balanced investment in labor and energy, while quality-adjusting suggests significant investment in labor over energy. Divergent outcomes provide cautionary tales for policymakers: greater understanding of upstream modeling choices and their downstream implications is needed.
Increasing energy efficiency is commonly viewed as providing a key stimulus to economic growth, t... more Increasing energy efficiency is commonly viewed as providing a key stimulus to economic growth, through investment in efficient technologies, reducing energy use and costs, enabling productivity gains, and generating jobs. However, this view is received wisdom, as empirical validation has remained elusive. A central problem is that current energy-economy models are not thermodynamically consistent, since they do not include the transformation of energy in physical terms from primary to end-use stages. In response, we develop the UK MAcroeconometric Resource COnsumption (MARCO-UK) model, the first econometric economy-wide model to explicitly include thermodynamic efficiency and end energy use (energy services). We find gains in thermodynamic efficiency are a key 'engine of economic growth', contributing 25% of the increases to gross domestic product (GDP) in the UK over the period of 1971-2013. This confirms an underrecognised role for energy in enabling economic growth. We attribute most of the thermodynamic efficiency gains to endogenised technical change. We also provide new insights into how the 'efficiency-led growth engine' mechanism works in the whole economy. Our results imply a slowdown in thermodynamic efficiency gains will constrain economic growth, whilst future energy-GDP decoupling will be harder to achieve than we suppose. This confirms the imperative for economic models to become thermodynamically consistent.
Internationally, reporting of greenhouse gas emissions is currently based on the production-based... more Internationally, reporting of greenhouse gas emissions is currently based on the production-based (PB) accounting method, which measures emissions generated in the place where goods and services are produced. However, this allocation method has been criticised for excluding emissions embodied in trade. Consequently, consumption-based (CB) accounting has been proposed as an alternative, or as a complementary information tool. This approach allocates emissions from goods and services to the country of the final consumer. It therefore includes emissions embedded in imports, plus aviation and shipping emissions, but excludes emissions embodied in exports. The main aim of this chapter is to outline the arguments in favour of and against adoption of CB accounting. In addition, it reviews how CB accounting is used in policy-making processes.
Working closely with government and industry, CIE-MAP conducts research to identify all the oppor... more Working closely with government and industry, CIE-MAP conducts research to identify all the opportunities along the product supply chain that ultimately deliver a reduction in industrial energy use. This is achieved by exploring: Efficiency gains that can be made in industry including use of heat and improvements in processes. Changing the use of materials needed to produce products including material substitution, light weighting and circular economy Changing the way the final consumer (industry, households or government) use products to reduce energy demand including product longevity and shifts from goods to services. CIE-MAP brings together the four leading UK universities of Bath, Cardiff, Leeds and Nottingham Trent with a range of expertise in engineering, economics, psychology, design, political science and governance. Funded by the Research Council's Energy Programme, CIE-MAP forms one of six centres focused on reducing energy demand in the UK.
This file contains the following data sheets used in the following paper: Nieto, J., Pollitt, H. ... more This file contains the following data sheets used in the following paper: Nieto, J., Pollitt, H. Brockway, P.E., Clements, L., Sakai, M., and Barrett J. "Socio-Macroeconomic Impacts of Implementing Different Post-Brexit UK Energy Reduction Targets to 2030." Energy Policy 158, 2021, 112556. Available at: https://doi.org/10.1016/j.enpol.2021.112556 *Inputs: Exogenous inputs to the model *Results Levels:Results for the E3ME and MARCO-UK scenarios in levels *Results vs Baseline: Results for the E3ME and MARCO-UK scenarios in volume index (Baseline=100) as presented in the paper *Summary results tables: Results according to different criteria
The chapter discusses the implications that a reduction in the world’s carbon footprint will have... more The chapter discusses the implications that a reduction in the world’s carbon footprint will have for global employment. The results show some of the unforeseen consequences for the developing world if the developed world decides to reduce its carbon footprint by reducing its imports. The chapter introduces us to the labour productivity of carbon, which represents the amount of labour associated with every kilogram of CO2 released during production of goods and services.
During the last decades, the UK economy has increasingly relied on foreign markets to fulfil its ... more During the last decades, the UK economy has increasingly relied on foreign markets to fulfil its material needs, becoming a net importer of both emissions and employment. While the emissions footprint reflects the pressure that consumption exerts on the planet's climate, the labour footprint represents the employment that is created across the globe associated with the demand for products and services. This paper has a twofold objective. First, it focuses on analysing the behaviour over time, drivers, and sectoral and regional composition of both UK's footprints. Second, it explores the relationship between both measures by estimating the elasticity between the growth of emissions and employment embodied in imports. The results show that around half of the emissions associated with UK consumption were generated outside its borders, while only 40% of total employment was domestic. This has important policy implications. Reducing UK's imports can contribute to cut both its footprints, generating less emissions abroad and more employment opportunities within. However, cutting imports is challenging, since this would require a lengthy and difficult process of structural transformation. The UK could contribute to curb emissions outside its borders, while safeguarding development overseas, by offering increased support to emission-intensive trade partners in the form of technology transfer and financial aid.
With no globally comprehensive agreement until 2020, there is a serious concern that the environm... more With no globally comprehensive agreement until 2020, there is a serious concern that the environmental effectiveness of climate policy in developed will be compromised. This report explores how to extend the responsibility of developed countries to minimise the effects of emission leakage in the absence of a global agreement between 2012 and 2020, focusing on the application of Border Carbon Adjustments (BCA) within a system of consumption-based GHG accounting.
We estimate the volume of emissions that could be potentially taxed by BCAs. We study the effects... more We estimate the volume of emissions that could be potentially taxed by BCAs. We study the effects of trade provisions and country and sectoral coverage on BCAs. Trade provisions can significantly reduce the scope and effectiveness of BCAs. Best available technology and exclusion of electricity reduce tariffs considerably. BCAs are not optimal policy tools to address carbon leakage concerns.
The relationship between human health and well-being, energy use and carbon emissions is a foremo... more The relationship between human health and well-being, energy use and carbon emissions is a foremost concern in sustainable development. If past advances in well-being have been accomplished only through increases in energy use, there may be significant trade-offs between achieving universal human development and mitigating climate change. We test the explanatory power of economic, dietary and modern energy factors in accounting for past improvements in life expectancy, using a simple novel method, functional dynamic decomposition. We elucidate the paradox that a strong correlation between emissions and human development at one point in time does not imply that their dynamics are coupled in the long term. Increases in primary energy and carbon emissions can account for only a quarter of improvements in life expectancy, but are closely tied to growth in income. Facing this carbon-development paradox requires prioritizing human well-being over economic growth.
Abstract For the period since 2011, the UK has been bound by European Union (EU) legislation rega... more Abstract For the period since 2011, the UK has been bound by European Union (EU) legislation regarding energy reduction targets to 2020. As of 2019, the UK had reduced its final energy use by 18% against a baseline projection to 2020, on track to meet its target of 18%. Whilst the rest of the EU-27 now set their own energy reduction targets to 2030, upon leaving the EU via Brexit, the UK is now free to choose its own energy targets. But what should the energy target be for 2030, and what are the socio-macroeconomic impacts and policy implications? To address this, we use two econometric energy-economy models to assess three different levels of energy reduction target, with 27%, 33% and 40% reduction in 2030 versus the baseline model projections. We find the strictest (40%) energy reduction target could deliver the largest economic and employment benefits. However, careful attention to policies are required, to ensure improvements to overall economy-wide energy efficiency whilst minimising rebound. Demand-side policies of serious scale within an ‘avoid-shift-improve’ framework are required, including massive building retrofits, significant improvements to industrial energy efficiency, switching to low energy transport modes, and moving away from meat-based diets.
The Strathprints institutional repository (https://strathprints.strath.ac.uk) is a digital archiv... more The Strathprints institutional repository (https://strathprints.strath.ac.uk) is a digital archive of University of Strathclyde research outputs. It has been developed to disseminate open access research outputs, expose data about those outputs, and enable the management and persistent access to Strathclyde's intellectual output.
The chapter discusses the implications that a reduction in the world’s carbon footprint will have... more The chapter discusses the implications that a reduction in the world’s carbon footprint will have for global employment. The results show some of the unforeseen consequences for the developing world if the developed world decides to reduce its carbon footprint by reducing its imports. The chapter introduces us to the labour productivity of carbon, which represents the amount of labour associated with every kilogram of CO2 released during production of goods and services.
Development of energy policy is often informed by economic considerations via aggregate productio... more Development of energy policy is often informed by economic considerations via aggregate production functions (APFs). We identify a theory-to-policy process involving APFs comprised of six steps: (1) selecting a theoretical energy-economy framework; (2) formulating modeling approaches; (3) econometrically fitting an APF to historical economic and energy data; (4) comparing and evaluating modeling approaches; (5) interpreting the economy; and (6) formulating energy and economic policy. We find that choices made in Steps 1-4 can lead to very different interpretations of the economy (Step 5) and policies (Step 6). To investigate these effects, we use empirical data (Portugal and UK) and the Constant Elasticity of Substitution (CES) APF to evaluate four modeling choices: (a) rejecting (or not) the cost-share principle; (b) including (or not) energy; (c) quality-adjusting (or not) factors of production; and (d) CES nesting structure. Thereafter, we discuss two revealing examples for which different upstream modeling choices lead to very different policies. In the first example, the (kl)e nesting structure implies significant investment in energy, while other nesting structures suggest otherwise. In the second example, unadjusted factors of production suggest balanced investment in labor and energy, while quality-adjusting suggests significant investment in labor over energy. Divergent outcomes provide cautionary tales for policymakers: greater understanding of upstream modeling choices and their downstream implications is needed.
Increasing energy efficiency is commonly viewed as providing a key stimulus to economic growth, t... more Increasing energy efficiency is commonly viewed as providing a key stimulus to economic growth, through investment in efficient technologies, reducing energy use and costs, enabling productivity gains, and generating jobs. However, this view is received wisdom, as empirical validation has remained elusive. A central problem is that current energy-economy models are not thermodynamically consistent, since they do not include the transformation of energy in physical terms from primary to end-use stages. In response, we develop the UK MAcroeconometric Resource COnsumption (MARCO-UK) model, the first econometric economy-wide model to explicitly include thermodynamic efficiency and end energy use (energy services). We find gains in thermodynamic efficiency are a key 'engine of economic growth', contributing 25% of the increases to gross domestic product (GDP) in the UK over the period of 1971-2013. This confirms an underrecognised role for energy in enabling economic growth. We attribute most of the thermodynamic efficiency gains to endogenised technical change. We also provide new insights into how the 'efficiency-led growth engine' mechanism works in the whole economy. Our results imply a slowdown in thermodynamic efficiency gains will constrain economic growth, whilst future energy-GDP decoupling will be harder to achieve than we suppose. This confirms the imperative for economic models to become thermodynamically consistent.
Internationally, reporting of greenhouse gas emissions is currently based on the production-based... more Internationally, reporting of greenhouse gas emissions is currently based on the production-based (PB) accounting method, which measures emissions generated in the place where goods and services are produced. However, this allocation method has been criticised for excluding emissions embodied in trade. Consequently, consumption-based (CB) accounting has been proposed as an alternative, or as a complementary information tool. This approach allocates emissions from goods and services to the country of the final consumer. It therefore includes emissions embedded in imports, plus aviation and shipping emissions, but excludes emissions embodied in exports. The main aim of this chapter is to outline the arguments in favour of and against adoption of CB accounting. In addition, it reviews how CB accounting is used in policy-making processes.
Working closely with government and industry, CIE-MAP conducts research to identify all the oppor... more Working closely with government and industry, CIE-MAP conducts research to identify all the opportunities along the product supply chain that ultimately deliver a reduction in industrial energy use. This is achieved by exploring: Efficiency gains that can be made in industry including use of heat and improvements in processes. Changing the use of materials needed to produce products including material substitution, light weighting and circular economy Changing the way the final consumer (industry, households or government) use products to reduce energy demand including product longevity and shifts from goods to services. CIE-MAP brings together the four leading UK universities of Bath, Cardiff, Leeds and Nottingham Trent with a range of expertise in engineering, economics, psychology, design, political science and governance. Funded by the Research Council's Energy Programme, CIE-MAP forms one of six centres focused on reducing energy demand in the UK.
This file contains the following data sheets used in the following paper: Nieto, J., Pollitt, H. ... more This file contains the following data sheets used in the following paper: Nieto, J., Pollitt, H. Brockway, P.E., Clements, L., Sakai, M., and Barrett J. "Socio-Macroeconomic Impacts of Implementing Different Post-Brexit UK Energy Reduction Targets to 2030." Energy Policy 158, 2021, 112556. Available at: https://doi.org/10.1016/j.enpol.2021.112556 *Inputs: Exogenous inputs to the model *Results Levels:Results for the E3ME and MARCO-UK scenarios in levels *Results vs Baseline: Results for the E3ME and MARCO-UK scenarios in volume index (Baseline=100) as presented in the paper *Summary results tables: Results according to different criteria
African governments face a major dilemma. On the one hand, structural transformation is necessary... more African governments face a major dilemma. On the one hand, structural transformation is necessary for achieving substantial and broad-based improvements in human well-being. On the other hand, structural transformation, together with rising affluence and a growing population, will necessarily intensify environmental pressures because of the increasing demand for natural resources, including both material and energy inputs used in production, the expanding magnitude of waste and pollution, and the growing reliance on non-renewable resources.
The Report suggests that this dilemma can be resolved by employing a development strategy called sustainable structural transformation. This involves the adoption of deliberate, concerted and proactive measures to promote structural transformation and the relative decoupling of natural resource use and environmental impacts from the growth process. Decoupling refers here to using fewer resources per unit of economic output (i.e. increasing resource productivity or resource efficiency) and mitigating the environmental impact of any resources that are used or economic activities that are carried out.
The Report includes a set of stylized facts on resource use and productivity in Africa. This information is based on the first comprehensive, comparative and quantitative study on the levels, trends and composition of resource use in Africa.
The Report discusses why a strategy of sustainable structural transformation is important and how strategic priorities for decoupling can be identified. It argues that it is essential that an appropriate enabling environment, including support measures such as increased aid for the energy sector and enhanced technology transfer mechanisms, be created at the international level in order to support Africa in achieving sustainable structural transformation.
The Report offers a set of policy recommendations to African policymakers and their development partners for implementing sustainable structural transformation. It argues that green industrial development must lie at the heart of sustainable structural transformation in Africa. This needs to be complemented by policies designed to increase access to energy, in particular sustainable energy, and by policies fostering a green agricultural revolution in Africa based on the sustainable intensification of agricultural production.
This report provides an analysis of where Greenhouse Gas emissions associated with UK consumption... more This report provides an analysis of where Greenhouse Gas emissions associated with UK consumption occur by both sector and country. The UK’s full supply chain emissions for 2004 from a consumption perspective are 853Mt CO2e. This does not include direct emissions from households as a result of burning fuel for heating and private car use. Of the 853 Mt CO2e, 15 product groups account for more than 75% of total emissions. Over 55% of the emissions associated with these products occur overseas.
With no globally comprehensive agreement until 2020, there is a serious concern that the environm... more With no globally comprehensive agreement until 2020, there is a serious concern that the environmental effectiveness of climate policy in developed will be compromised. This report explores how to extend the responsibility of developed countries to minimise the effects of emission leakage in the absence of a global agreement between 2012 and 2020, focusing on the application of Border Carbon Adjustments (BCA) within a system of consumption-based GHG accounting.
Co-authored with Jonathan B Norman,
André Cabrera Serrenho, Samuel J G Cooper, Anne Owen,
Marco S... more Co-authored with Jonathan B Norman, André Cabrera Serrenho, Samuel J G Cooper, Anne Owen, Marco Sakai, Kate Scott, Paul E Brockway, Simone Cooper, Jannik Giesekam, Giuseppe Salvia, Jonathan M. Cullen, John R Barrett, Tim Cooper, Geoffrey P Hammond, Julian M Allwood
Handbook on Trade Policy and Climate Change, Mar 2022
Internationally, reporting of greenhouse gas emissions is currently based on the production-based... more Internationally, reporting of greenhouse gas emissions is currently based on the production-based (PB) accounting method, which measures emissions generated in the place where goods and services are produced. However, this allocation method has been criticised for excluding emissions embodied in trade. Consequently, consumption-based (CB) accounting has been proposed as an alternative, or as a complementary information tool. This approach allocates emissions from goods and services to the country of the final consumer. It therefore includes emissions embedded in imports, plus aviation and shipping emissions, but excludes emissions embodied in exports. The main aim of this chapter is to outline the arguments in favour of and against adoption of CB accounting. In addition, it reviews how CB accounting is used in policy-making processes.
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The Report suggests that this dilemma can be resolved by employing a development strategy called sustainable structural transformation. This involves the adoption of deliberate, concerted and proactive measures to promote structural transformation and the relative decoupling of natural resource use and environmental impacts from the growth process. Decoupling refers here to using fewer resources per unit of economic output (i.e. increasing resource productivity or resource efficiency) and mitigating the environmental impact of any resources that are used or economic activities that are carried out.
The Report includes a set of stylized facts on resource use and productivity in Africa. This information is based on the first comprehensive, comparative and quantitative study on the levels, trends and composition of resource use in Africa.
The Report discusses why a strategy of sustainable structural transformation is important and how strategic priorities for decoupling can be identified. It argues that it is essential that an appropriate enabling environment, including support measures such as increased aid for the energy sector and enhanced technology transfer mechanisms, be created at the international level in order to support Africa in achieving sustainable structural transformation.
The Report offers a set of policy recommendations to African policymakers and their development partners for implementing sustainable structural transformation. It argues that green industrial development must lie at the heart of sustainable structural transformation in Africa. This needs to be complemented by policies designed to increase access to energy, in particular sustainable energy, and by policies fostering a green agricultural revolution in Africa based on the sustainable intensification of agricultural production.
André Cabrera Serrenho, Samuel J G Cooper, Anne Owen,
Marco Sakai, Kate Scott, Paul E Brockway, Simone Cooper,
Jannik Giesekam, Giuseppe Salvia, Jonathan M. Cullen,
John R Barrett, Tim Cooper, Geoffrey P Hammond, Julian
M Allwood