Australia’s Consumption-based Greenhouse Gas Emissions

We use data from the World Input-Output Database in a multiregional input–output model to analyse Australian consumption-based greenhouse gas emissions for the years 1995 to 2009. We find that the emission content of Australian macroeconomic activity has changed over the 15-year period. Consumption-based emissions have been growing faster than production-based emissions since 2001. We show that emissions embodied in Australian imports are increasingly becoming a significant source of emissions. We investigate emissions in Australian imports and find that increased trade with China contributed substantially to the increase in Australia’s consumption emissions. China was the largest exporter of emissions to Australia and accounted for almost half of emissions embodied in Australian imports since 2002. The growth of trade with China coincides with the increase in imported emissions as well as the increase in aggregate consumption emissions. Our results suggest that tracking consumption emissions together with production emissions provides a more complete picture of Australian emissions.