Policies and Consumption-Based Carbon Emissions from a Top-Down and a Bottom-Up Perspective

Abstract

Two major approaches for calculating consumption-based carbon emissions\rcan be distinguished: top-down approaches, in the form of multi-regional\rinput-output (MRIO) models, and bottom-up approaches, in the form of life cycle\rassessment (LCA). Both approaches have pros and cons and are very data-intensive.\rSeveral MRIO databases have been developed and published over the past years.\rThese databases, which have been refined and validated, will be used for policy\ranalysis. As LCA is usually only applied to very specific products and product\rgroups, analysis is limited and many products have not yet been looked at. This\rpaper makes use of both a top-down and bottom-up approach to calculate the\rimpacts of different policy measures on the development of consumption-based\rcarbon emissions in the EU28 and on emissions elsewhere in the world. The policy\rexamples used are the EU’s CO2 in Cars Regulations and the South\rAfrican renewable energy initiative. The results from the top-down approach are\rthen compared with those from the bottom-up approach. Both bottom-up and\rtop-down approaches use the same underlying assumptions regarding the impacts,\rbut due to the very different nature of the methodologies, differences in the\rresults are observed, though sign and scope of the results are the same for the\rtwo cases. Part of the deviations can be explained by differences in\rmethodology and scenario design due to these differences. It can be concluded\rthat bottom-up and top-down approaches can and need to be applied to different\rpolicies and are generally complementary.