Europe’s Carbon Loophole

The European Union is broadly credited with reducing its emissions of greenhouse gases (GHGs) and is on track to meet its goal of a 20 percent reduction in GHGs in 2020 compared to 1990 levels. But a full lifecycle accounting of European member state carbon emissions, including those emissions caused through consumption of imported goods, tells a different story: Under this accounting method, EU emissions have actually grown by 11 percent – with some nations seeing substantially higher emissions growth than others.

These nations are taking advantage of the “carbon loophole” – an artifact of climate policy that fails to consider a nation’s imports when calculating national emissions and associated climate commitments. Research shows that as much as 23 percent of global greenhouse gas emissions pass through this loophole, originating in regions with little or no carbon emissions regulation and ending in nations with an increasingly regulated carbon market.

Unless and until the carbon loophole is closed, the world will struggle to meet global emissions targets and avoid dangerous climate change. We cannot keep pushing industrial carbon emissions around the world in an unaccountable manner.

This discussion draft of Europe’s Carbon Loophole, published in September of 2017, helps quantify the loophole for EU member states, and offers potential pathways to close the loophole through the Buy Clean suite of policy options.

We are seeking comments on this draft version – please email by the end of October.