Incorporating energy trade into national greenhouse gas emission estimates

As negotiations aimed at establishing national emissions reductions targets proceed, it is very important to understand the differences between alternative methods of estimating and attributing emissions to the respective countries. Current estimates of national energy-related greenhouse gas (GHG) emissions frequently consider only domestic emissions sources. However, this approach may inaccurately reflect the true level of global emissions resulting from energy consumed by a particular economy, particularly if it engages in significant levels of energy trade. Alternative estimation methods may more accurately reflect these ``trade-based`` emissions. In this paper, the authors propose a method of estimating emissions, by country, that incorporates the effects of international energy trade. The paper shows that estimated trade-based emission levels for a country can significantly differ from domestic-based emissions estimates, depending on that country`s levels of fossil energy imports and exports relative to its domestic energy consumption. Four preliminary case studies are presented to demonstrate the impact of energy trade on emissions estimates, including the United States, Japan, France, and Saudi Arabia. Countries that are large exporters of fossil energy (like Saudi Arabia) tend to have reduced emissions attributable to their economy, while the converse is true for large energy importers (such as Japan).