Sustainability in supply chain: carbon leakage
“Under the Kyoto protocol (UNFCCC) and international trade rules, countries’ emissions are based on production levels rather than consumption.”
For some western countries more than 30% of consumption-based emissions are imported and hence not accounted for, whilst for China 22.5% of its emissions are generated for the production of goods for consumers elsewhere (Davis & Caldeira, 2010) That is why this is called ‘carbon leakage’ - carbon emissions slip through the measurement net and this can introduce significant inequalities on countries’ rights to carbon allowances
emissions