Inventory Case 5: Oregon Consumption Based Emissions Inventory

Responsible Party: 
Oregon DEQ, with Stockholm Environment Institute US as contractor
Case Study Year: 
2009
State Involved: 
Oregon
Country Involved: 
United States
Case Study Type: 
Inventory Case

1.Who did it: Oregon DEQ, with Stockholm Environment Institute US as contractor.

2. What they did (and when): Developed a consumption-based emissions inventory for the State of Oregon for calendar year 2005. The project started in 2009 and was completed in the summer of 2011. Results were published in October 2011. The following document provides an overview of the CBEI methodology (it was prepared as a background paper for a group of external stakeholders that DEQ convened in 2010 to review draft results): CBEI supplemental info for workgroup.pdf.

The 2005 consumption-based inventory was published as a series of stand-alone reports . Following completion of these reports, DEQ updated the 2005 inventory for 2010, and published it alongside the state’s 2010 “in-boundary” inventory (and a third inventory, focusing on transportation-sector emissions) in a report jointly produced with the state’s Departments of Energy and Transportation. DEQ has since updated the consumption-based inventory for years 2012 and 2014.

3. Why they did it: State and local governments, as well as businesses, media, and the general public, often base and/or describe greenhouse gas reduction efforts in the context of GHG inventories. In addition, inventories are used to define "baselines" and measure progress at reducing emissions. Because emissions are caused by both production- and consumption-related activities, and because Oregon contributes to emissions both inside and outside of Oregon's borders, it can be challenging to capture all emissions is a single accounting framework. And yet, a comprehensive view of emissions can provide Oregonians with more complete information on how Oregon contributes to climate change, and opportunities to reduce greenhouse gas emissions. This expanded view might reveal opportunities to cost-effectively reduce greenhouse gas emissions that would otherwise go unnoticed or be de-emphasized.

One approach is to supplement the traditional inventory with a consumption-based view of emissions. Specifically, a consumption-based inventory allows for a deeper understanding of the ultimate drivers of emissions across all sectors of the economy. It can also improve understanding among consumers, businesses, and governments about how their choices effect both direct and indirect emissions, and can identify "hot spots" and unsustainable consumption patterns and trends. Consumption-based inventories are also important for organizations working in the fields of sustainable consumption and materials conservation (including green building, waste prevention, and product stewardship).

Specific to materials management, approximately 42% of GHG emissions in the U.S. are associated with the production, transportation, and disposal of materials. Emissions are even larger if the impacts of imported goods are considered. Many of these emissions are not included in state and local inventories, and when they are, are apportioned to other, broader categories such as "transportation" and "electricity use." Further, actions related to materials management in Oregon could reduce emissions from the perspective of the global economy, but increase emissions in Oregon (or vice versa). Understanding and accounting for the full, global nature of emissions associated with materials management in Oregon thus takes on importance - although it is important to note that a pure consumption-based inventory does not treat consumption of materials any differently than it treats consumption of services or energy, and that it does not present a full picture of all of the emissions associated with materials used in a community, but rather, only those associated with satisfying consumption.

The consumption-based approach also explicitly acknowledges the problem of leakage – the movement of emissions to other states or countries as production shifts from one region to another. The emissions from a relatively clean Oregon producer are included in Oregon‟s existing inventory, but the emissions from a dirty foreign competitor are not. As production shifts to countries with more carbon-intensive fuel mixes, worldwide emissions resulting from consumption activities in Oregon may increase, but the existing geographic-based inventory would report a decrease in emissions.

For these reasons, Oregon‟s Environmental Quality Commission directed DEQ in 2007 to further evaluate, and, as appropriate, work to integrate consumption-related emissions into inventory efforts. In beginning this project, DEQ identified the following objectives:

  • Estimate the greenhouse gas (GHG) emissions associated with the production of goods and materials in Oregon, and all consumption activities (including energy as well as goods and materials) in Oregon.
  • For emissions associated with consumption in Oregon, disaggregate emissions by life cycle stage (production, transport, use, disposal) and geography (in-state, other domestic, non-domestic).
  • Relate these estimates to the State's existing GHG inventory and demonstrate which emissions are already included, and which are not.
  • Identify categories of consumption (including but not limited to goods and materials) that contribute the most to Oregon's consumption-based GHG emissions, both in absolute terms and as emissions intensities (high emissions per dollar spent).
  • Develop data sources and methodologies that are robust enough to permit consistent, persistent, and low-cost data collection and the ability to identify points of monitoring for future years.
  • Document assumptions, methodologies, and data sources, enabling analysis in future years, and allowing other states and possibly local governments as well to replicate this effort.
  • Identify additional data needs that would improve the reliability of these estimates in the future, thus establishing a potential research agenda.
  • Present results in a manner that helps policy makers, the general public and others understand the relative impact of materials production- and consumption-related emissions, including a) the impacts of increasing/decreasing consumption of materials/products, b) the potential benefits of shifting from high-carbon to low-carbon goods and materials, and c) the impact of shifts between in-state, domestic out-of-state, and foreign production of materials/products that are consumed locally.

As part of this project, DEQ expected the analysis to answer some additional questions, such as:

  • How do the production-based and consumption-based inventories compare against each other?
  • How much of the emissions associated with in-state consumption occur in Oregon vs. the rest of the U.S. vs. other countries?
  • Comparing similar products, is there a greenhouse gas benefit to consuming Oregon-made goods relative to goods made elsewhere in the U.S.? Relative to goods made in other countries? How large is this benefit, and how much of it is related to differences in production energy mixes vs. transportation requirements vs. other factors?
  • How much of Oregon‟s consumption-related emissions are associated with different categories of consumption? For example, how do emissions compare between in-state consumption of food, other products, electricity, and heating fuels?

Because such an effort has not been undertaken before in the U.S., and given limited resources, DEQ never expected that all of these objectives and questions would be equally satisfied in this project. Further, certain methodological issues (treatment of land-use related emissions, for example) are being deferred entirely for future consideration.

4. Results/outcomes/successes/failures/lessons learned: The first consumption-based emissions inventory was published in October 2011. Summary and technical reports (prepared by Stockholm Environmental Institute) can be viewed at the project's webpage. The original summary report has been widely lauded for presenting a seemingly-complex topic in very clear and understandable text. The technical report provides additional details of the methodology and some additional results. Also available on the project's webpage are two supplemental reports prepared by DEQ. The first explores the results through an additional lens, grouping emissions into four broad categories: materials, services, electricity and fuels. It explores several key questions related to materials. The second supplemental report reconciles the consumption-based inventory with DEQ's separate estimates of the greenhouse gas reductions associated with waste recovery (recycling, composting, energy recovery) in Oregon.

DEQ has since updated the consumption-based inventory for 2010, 2012 and 2014. The 2010 report is notable for reporting consumption-based emissions alongside “in-boundary” emissions in a single report, as well as providing a Venn diagram that illustrates the overlap between the two inventories.
A few highlights of results from this research (all results are for 2010, which provides the most comprehensive assessment to date):

  • Oregon's consumption-based GHG emissions are about 19 percent larger than the state's "in-boundary" greenhouse gas inventory (which includes out-of-state emissions associated with electricity used in-state).
  • More than half of Oregon's consumption-based GHG emissions occur in other states and countries.
  • Roughly 88% of consumption-based emissions are associated with just two life cycle stages: production (including supply chain) and use (which includes the impacts of using energy-consuming devices such as cars and appliances). Freight transport (of finished products), wholesale/retail operations, and end-of-life all contribute relatively little to emissions.
  • The direct consumption of electricity contributes only 15 percent to Oregon's consumption-based emissions. The direct consumption of fuels (for both transportation and use in appliances) contributes 22percent. In contrast, the direct consumption of materials contributes somewhere between 35 and 48 percent (depending on the definition of "materials"). Direct consumption of services makes up the difference, at 16 to 29 percent. It should be noted that many of the emissions associated with consumption of materials are due to electricity and fuel use in production, so electricity and fuels are still of tremendous importance. However, when viewed through the lens of what is consumed (what economists call "final demand"), materials take on greater importance.
  • Consumption-based emissions are unevenly distributed across different types of commodities. Just three major categories of consumption contribute half of all consumption-based emissions: personal vehicles (mostly due to use, but production contributes some), appliances (including furnaces; most of these emissions are related to use), and food (most of these emissions are associated with production).
  • Emissions intensities, a measure of emissions per dollar spent, vary widely between commodities, suggesting the potential for rebound effects: as consumers reduce consumption of one commodity and use the savings to increase consumption of another, net emissions may increase or decrease, depending on the nature of the shift in consumption.

Response to this inventory has been generally positive. DEQ has been careful to frame the inventory as complementing (rather than intending to replace) the state's conventional greenhouse gas inventory. The two approaches describe different but equally valid ways in which Oregon contributes to global warming. Only by holding them up together does one obtain a more comprehensive perspective. The report has informed - and to some degree, legitimized - discussions of "sustainable consumption" in several instances, including DEQ's 2050 Vision for Materials Management project. DEQ has also used it in several research projects, including an evaluation of the greenhouse gas emissions relative to nutritional value of different beverages, and a screening tool to help the City of Eugene identify "high carbon" purchases.

The original project took longer than anticipated to complete for a variety of reasons - some technical, other due to the novelty of the concept and DEQ's concern that stakeholders might misunderstand or misconstrue the results or even DEQ's motivation for conducting the study. Originally, stakeholders were generally unfamiliar with the concept of "consumption-based" emissions, as this type of analysis is still quite new. Significant effort was invested in meeting with stakeholders and addressing their concerns. DEQ also convened a group of stakeholders and topic experts who met as a group several times to discuss and review elements of the project.

Subsequent updates have required significantly less effort and time. DEQ plans a full update of Oregon’s the consumption-based inventory every five years, with “light touch” updates of key variables only in intervening years as workload and resources allow.