Decreasing trade to cut emissions may squeeze poor countries' incomes

Apr 05, 2012

There’s a growing awareness of the role of consumer choices in reducing greenhouse gas (GHG) emissions, and a 2009 UK study showed that an aggressive effort to change consumption patterns – to buy fewer goods and more services, reduce waste, and eat less meat  (while keeping overall spending levels the same) – could reduce associated emissions by at least 10 per cent.

But many of these goods are made in lower-income for which international trade can be a critical source of income. And if all high-income countries were to shift spending to lower-GHG types of products and services, a new SEI analysis shows, the average GDP of lower-income countries could drop by more than 4 per cent, and the GDPs of Least Developed Countries (LDCs), by more than 5 per cent.

“This may not seem like a lot, especially given the urgency of mitigating climate change, but people in these countries are already mired in poverty,” says Ellie Dawkins, a research associate with the Stockholm Environment Institute at the University of York and co-author of the report. “Per capita incomes in LDCs are only one-tenth those in the UK. Clothing production in particular is a big source of revenue for several of them, so while the planet will thank you for buying fewer outfits, the people who sewed them may not be so happy.”

Ellie Dawkins and her York colleagues, including co-author Anne Owen (now at the University of Leeds), have carried out extensive research on associated with consumption, developing tools that help nations and communities gauge their carbon footprints, and reaching out to consumers to show them how they can make a difference in the fight to prevent dangerous climate change.

The report’s lead author, meanwhile, Peter Erickson, a senior scientist in SEI’s United States Centre, has helped develop consumption-based emissions inventories in the United States and has advised the city of Seattle, Washington, on ways to meet its goal of being “carbon-neutral” by 2050.

“If we want to keep temperatures from rising more than 2°C above pre-industrial levels, shrinking our carbon footprint is a must,” he says. “But we can try to find ways of lowering our footprint that do not disproportionally harm people in the poorest countries.”

The answer is not, the authors stress, to give up on efforts to reduce emissions from consumption – but rather to find ways to simultaneously promote sustainable development. One promising approach could be to focus on buying goods from countries with low-GHG production: By their preliminary calculations, using a multiregional input-output (MRIO) model, the GHG intensity of clothing production, for example, can vary by a factor of four or more between countries, depending on how they produce electricity (e.g. hydropower vs. coal), how much manual labour vs. machines they use, the materials used, and other still-unknown factors.

Thus, preferentially sourcing clothes from lower-income, lower-GHG countries instead of from higher-income, higher-GHG countries could reduce emissions just as much as buying fewer clothes.

High-income countries could also help the poorest countries lower the GHG intensity of production, the authors say. They could do so through direct technology transfer, through market-based mechanisms such as sectoral crediting, or mechanisms such as the Green Climate Fund; discussions are also advancing, particularly in Europe, about how to orient the Clean Development Mechanism (CDM) to focus on Least Developed Countries after 2012, providing another means to aid in emission reduction and development in poor countries.

A third strategy is to focus on importing higher-cost, higher-quality, and value-added goods. This could have both GHG and development benefits if these goods both last longer (meaning fewer new goods are needed), and sell for higher prices, with a large share of the added value retained by the producing country.  Further research is needed to determine how best to achieve this, the authors note – but it could include technology transfer, technical assistance, and help building local expertise and buying new equipment.

Explore further: Luxembourg: a tax haven by any other name? Professor on 'secret' tax deals

More information: The new study, Low-Greenhouse-Gas Consumption Strategies and Impacts on Developing Countries, is available on the SEI website as SEI Working Paper 2012-01, with an accompanying policy brief.

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