In a previous post, I explored the relationship between C02 emissions, country income levels and population looking at production data. Here, emissions are assigned to the country where goods or services are produced or generated, disregarding final consumption. In a globalized economy, however, we should expect that many products are indeed consumed far away from where their home countries. Migration is the normal state of affairs. For example, steel produced in China, Japan or India, the top three world leaders, might travel to the U.S or the E.U for final consumption. CO2 emissions generated by such steel consumption should thus be allocated to the countries importing steel – and not to the steel producers.
Note that in our example the U.S. and the E.U can, in turn, export products that
