Austriaʹs CO2 responsibility and the carbon content of its international trade

Seeking to limit global warming to 2 °C puts narrow restrictions on the remaining carbon budget. While the prevalent accounting framework for carbon emissions is production based (Production-Based Principle, PBP), we here quantify the CO2 emissions on the basis of the Consumption-Based Principle (CBP) for Austria. At a methodological level, a Multi-Regional Input–Output model with full linkages is used to account for Austriaʹs CO2 responsibility on a global scale. Estimates are carried out for the years 1997 and 2004. Results show that during 1997 CO2 responsibility based on CBP were 36% larger than those based on PBP. This relation has increased through time. The CBP indicator of 2004 was 44% larger than the PBP. In terms of carbon emission location, for each Euro spent on Austrian final demand in 2004, it is estimated that two-thirds of the CO2 emissions occur outside Austrian borders. Regarding the origin of the emissions embodied in imports, it is estimated that about one-fourth originated in non-Annex I countries in 1997. This proportion increased to one-third by 2004. Due to this divergence between CBP and PBP indicators, there is a need to re-think current accounting bases in order to properly assign CO2 responsibilities.