The Carbon Loophole in Climate Policy

Quantifying the Embodied Carbon in Traded Products

The carbon loophole refers to the embodied greenhouse gas emissions associated with production of goods that are ultimately traded across countries. These emissions are a growing issue for global efforts to decarbonize the world economy. Embodied emissions in trade are not accounted for in current greenhouse gas accounting systems. If they were, many promising climate trends would be negated or reversed. For example, many achievements of reducing emissions by developed countries under the Kyoto Protocol would actually appear as emissions outsourced to developing countries.

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Global Efficiency Intelligence, LLC. just published a report in collaboration with the ClimateWorks Foundation and KGM & Associate Ltd. to use the most recent available data and a cutting-edge model to conduct a global assessment of the extent of the embodied carbon in globally traded goods, so-called carbon loophole.