SBB 12 April Production-based accounting for greenhouse gas emissions (GHG) could cause carbon leakage but a consumption-based approach would not, argue Sonia Thimmiah, UK head of sustainability at Accenture, and John Barrett, chair in sustainability research at Leeds University. A consumption-based approach would also benefit steelmakers, they add.
Regulation of GHG emissions currently focuses on producers. However, differing regulations across regions will impose different costs on industry. Steelmaking could therefore move from high-cost to low-cost regions, Thimmiah warned delegates at Steel Business Briefing’s Green Steel Strategies conference.
OECD countries have reduced their direct GHG emissions. However, they import goods which result in GHG emissions during their production. The emissions in goods consumed by OECD countries have increased and consumers should bear some responsibility for this, Thimmiah and Barrett suggest.
An approach based on consumption would not cause carbon leakage as products would face the same regulation no matter where they were made. Measuring carbon emissions across the production, distribution and use phases of a product may also put pressure on consumers to buy responsibly. This would be compatible with the kind of life-cycle approach favoured by groups such as Worldsteel, Thimmiah and Barrett say.
This approach would also allow steelmakers to work with distributors and end-users to reduce the total GHG emissions of their products across the supply chain. This could help cement relationships with customers and would mean the responsibility for combating climate change would not be so focused on industry, they add.