COP29: A reckoning with consumption

The uncomfortable truth behind decades of climate negotiations

Nearly three decades of climate talks, commitments, and agreements have taken place worldwide, starting with the first COP1 in Berlin in 1995 and ending with the most recent COP28 in Dubai. Record-breaking temperatures, an increase in extreme weather events, and grim warnings from the scientific community are all becoming commonplace as the globe continues to speed towards a climatic disaster in spite of these efforts. This harsh truth compels us to ask ourselves a basic question: have we even correctly characterised the challenge?

Territorial emissions, a measure that only takes into consideration greenhouse gases released inside a nation's boundaries, have been a major component of international climate negotiations for far too long. Despite its seeming simplicity, this strategy has serious problems in a world where trade and globalisation have radically connected people. By fabricating a false narrative, it enables industrialised countries to outsource their emissions-intensive industries to developing nations while simultaneously projecting an image of being climate champions. In actuality, the weight is only transferred across physical borders, giving the appearance that economic expansion and environmental effect are being separated.

The perils of a misplaced burden

This flawed metric perpetuates a system where:

• Developed nations can claim emissions reductions, whereas in other places, their consumption habits still fuel unsustainable manufacturing methods. For example, a nation may import items made in nations that rely heavily on coal power while boasting about dismantling coal-fired power plants at home.

• Developing nations bear a disproportionate burden for emissions produced in order to meet the demands of nations with greater affluence. As a result, nations pursuing economic growth are unfairly punished for manufacturing items that are used by people who have already attained high levels of wealth.

The true scale of the climate crisis remains obscured, impeding the creation of just and efficient solutions. Territorial emissions provide us a false sense of security by concealing the full effects of consumption, which delays the urgent action required to prevent a climate disaster.

Unmasking the illusion: why territorial emissions persist

The enduring reliance on territorial emissions stems from a confluence of factors:

• Simplicity and sovereignty: It is politically acceptable to measure emissions within national borders since it is simpler and consistent with the idea of national sovereignty. By avoiding the complications of addressing emissions entrenched in global supply networks, it enables nations to concentrate on activities within their own borders.

• Historical responsibility: Given their history of high emissions, developed countries might be hesitant to embrace a metric that emphasises their continued consumption-based contribution to the issue. Fear of more accountability and possible financial commitments to aid mitigation and adaptation initiatives in developing nations is the root cause of this reluctance.

• Political considerations: Making the switch to consumption-based accounting might upset the balance of power and spark opposition from nations that stand to gain from the status quo. Trade disputes and challenges to long-standing economic models that depend on the unrestricted movement of goods and services without taking into consideration their effects on the environment could result from it.

Consumption-based emissions: a call for radical transparency

With the world becoming increasingly interconnected, consumption-based emissions (CBEs) provide a more fair and precise means to gauge accountability. CBEs reveal how consumption habits actually affect the environment, especially in the Global North, by taking into consideration emissions that are a part of the entire lifespan of goods and services, regardless of where they are created.

Instead of placing blame, this change in viewpoint aims to promote a common awareness of the climate situation and promote more just and efficient solutions. It recognises that climate change is a worldwide issue that calls for cooperation and that accountability stems from both the source of emissions and their final consumption.

The power of per capita CBEs: unveiling individual responsibility

Going one step further, per capita emissions based on consumption offer a more complex perspective on the climate situation. This indicator highlights the lopsided role of wealthy countries in the issue by exposing the glaring differences in individual consumption patterns between the North and South.

For example, although having high overall emissions, China's emissions per person are much lower than those of the US or many European nations. This emphasises how crucial it is to take consumption trends into account when determining responsibility and creating plans for climate action. It casts doubt on the idea that rising emissions are only the fault of emerging nations and emphasises the necessity for people in developed countries to lessen their environmental impact.

A new dawn for climate action: the promise of CBEs

There are significant ramifications for COP29 and the future of climate action from the move to consumption-based emissions, especially per capita measurements:

1. Unveiling the true challenge: Using CBEs to accurately define the problem enables more focused and efficient solutions. It makes us face the unsustainable consuming patterns that are causing the crisis and encourages a change to circular economies and more sustainable lives. This could entail encouraging environmentally friendly consumption habits, funding the creation of substitute materials and goods, and investing in technology that use fewer resources.

2. Bridging the divide: More empathy and understanding between rich and developing countries are fostered by CBEs, laying the groundwork for more equitable burden-sharing and climate action. CBEs can aid in bridging the divide between the North and South by recognising the interdependence of global emissions, which promotes cooperation and a sense of shared responsibility.

3. Guiding climate finance: CBEs promote decarbonisation initiatives, adaptation strategies, and technology transfer by offering a more convincing argument for greater financial flows from the North to the South. By doing this, developing nations can avoid carbon-intensive development paths and advance to cleaner technologies. It also acknowledges that affluent countries have historically contributed to the climate catastrophe and have a duty to assist those who are most at risk from its effects.

4. Acknowledging intertwined emissions: CBEs draw attention to how global emissions are interconnected in today's globalised society, highlighting the necessity of shared responsibility and cooperative solutions. They emphasise that addressing emissions throughout supply chains and promoting sustainable patterns of production and consumption are key components of a coordinated response to the global problem of climate change.

CBEs: a framework for equitable climate finance

A strong framework for organising climate financing transfers from the Global North to the Global South is offered by consumption-based emissions. CBEs can assist in directing the distribution of financial resources to support mitigation and adaptation activities in developing countries by recognising that wealthy countries have some of the responsibility for emissions ingrained in their consumption patterns.

• Prioritising investments: CBEs can prioritise investments in countries and sectors with the greatest potential for emission reductions. By identifying sources of consumption-related emissions, climate finance can support sustainable practices, capacity building, and technology transfer.

• Ensuring equity and fairness: Developing countries disproportionately bear the emissions linked to consumption in the Global North, so CBEs provide a foundation for more equitable climate finance distribution, supporting a fair low-carbon transition.

• Enhancing transparency and accountability: CBEs link consumption patterns with financial responsibility, ensuring that climate finance achieves intended goals and enables accountability through clear tracking.

• Mobilising private sector investment: CBEs highlight opportunities and risks in production and consumption, encouraging businesses to invest in sustainable practices and advancing the shift to a low-carbon economy.

CBEs and the role of international institutions

International organisations such as the World Bank, IMF, and Multilateral Development Banks (MDBs) play a crucial role in advancing the integration of CBEs into sustainable finance and climate action. These institutions can leverage their resources and expertise to drive CBE adoption globally:

• Integrate CBEs into lending and investment decisions: MDBs can prioritise projects that support sustainable production and consumption patterns, directing funding towards energy efficiency, renewable energy, and circular economy projects in developing nations.

• Develop CBE-based methodologies and tools: By creating reliable methodologies and tools to measure and track CBEs, international organisations can facilitate the incorporation of CBEs into both national and international climate policies, supporting a consistent approach to measurement.

• Promote policy dialogue and capacity building: The World Bank and IMF can foster discussions on the impact of CBEs on financial structures and climate strategies, offering technical assistance, forums for knowledge sharing, and capacity-building initiatives to encourage CBE adoption.

• Advocate for CBE-informed climate agreements: By championing the inclusion of CBEs in global climate frameworks, international institutions can encourage nations to adopt CBEs as a core measure of climate responsibility, promoting a shift towards sustainable consumption and production on a global scale.

Real-world examples: CBEs in action

Consumption-based emissions accounting has already demonstrated its impact through initiatives led by both private and public entities:

• Corporate supply chain emissions: According to the Carbon Disclosure Project (CDP), a company’s supply chain emissions are typically 5.5 times higher than its direct emissions. Corporations such as Apple and Patagonia are pioneering efforts to reduce these emissions across their value chains, setting benchmarks by implementing policies from raw material sourcing to production and distribution.

• Norwegian government pension fund investments: Recognising the importance of aligning investments with consumption-based responsibilities, the Norwegian Government Pension Fund, one of the largest sovereign wealth funds, has divested from fossil fuels and invested significantly in renewable energy. This shift reflects growing awareness of the need to support the transition to a low-carbon economy through responsible investment.

• EU’s Carbon Border Adjustment Mechanism (CBAM): The European Union has proposed CBAM, a carbon pricing mechanism on imported goods based on their emissions content, to level the playing field for European industries. This initiative is poised to encourage the adoption of cleaner technologies in exporting countries, paving the way for more sustainable global trade practices.

A call to action: embracing a new era of climate responsibility

COP29 presents an opportunity for the international community to fundamentally rethink its approach to climate action. Moving beyond territorial emissions to embrace consumption-based emissions is essential to fostering accountability, transparency, and shared responsibility in tackling the climate crisis.

This shift calls for concerted efforts across all stakeholders:

• To negotiators and policymakers:

  • Embrace CBEs as a key metric to acknowledge shared responsibility in global emissions.
  • Invest in developing robust, standardised methodologies for calculating CBEs.
  • Encourage open dialogue on CBEs’ implications for trade, cooperation, and climate policy.

• To the Global North:

  • Recognise the role of consumption patterns in climate change and take steps to reduce environmental impacts.
  • Increase climate finance to support mitigation and adaptation in developing nations.
  • Promote sustainable consumption through labelling, education, and incentives.

• To the Global South:

  • Advocate for CBE inclusion in climate agreements to ensure equitable responsibility sharing.
  • Develop green industrial strategies that leverage climate finance and technology transfer.
  • Strengthen regional cooperation to address climate change collaboratively.

• To businesses and investors:

  • Measure and reduce supply chain emissions by investing in sustainable practices.
  • Align investments with CBE principles to support a low-carbon economy.
  • Promote transparency by disclosing emissions data that includes CBEs.

• To civil society and individuals:

  • Demand accountability from corporations and governments in meeting CBE-based climate goals.
  • Adopt sustainable lifestyles and promote eco-friendly products and services.
  • Spread awareness of CBEs and advocate for a more just and effective approach to climate responsibility.

Conclusion: a turning point for climate action

COP29 in Baku stands as a potential milestone in the global fight against climate change. By adopting the paradigm shift that CBEs offer, we can move away from outdated metrics that obscure the real scale of our impact and toward an era of transparency, accountability, and collective action. This approach does not simply reassign responsibility; it opens a path to more effective and just climate solutions that resonate with a shared understanding of the crisis.

The journey to a sustainable future will be challenging, requiring transformative changes in production, consumption, and collaboration. However, the stakes are too high to continue relying on metrics that conceal the true nature of our environmental footprint. By embracing CBEs, we can catalyse a shift that fosters global cooperation, promotes sustainable development, and supports equitable climate action for all.

This transition involves:

• Embracing radical transparency: Enabling consumers, businesses, and governments to make informed choices based on the complete environmental impact of consumption.
• Driving targeted financial flows: Directing climate finance to developing nations based on principles of equity and CBEs, supporting their decarbonisation and adaptation efforts.
• Fostering international cooperation: Encouraging nations to manage supply chain emissions, adopt sustainable production and consumption patterns, and achieve a just transition to a low-carbon economy.

Incremental progress is no longer an option. COP29 must be a watershed moment—a time to acknowledge the urgency of the climate crisis and commit to a bold new vision for a sustainable future. By recognising our interconnected actions and shared accountability, we can foster a world where environmental stewardship and economic prosperity coexist.

Let us seize this moment to redefine our relationship with the planet and pave the way for a future in which sustainability and economic growth go hand in hand. Now is the time to act.