According to the IPCC, “National inventories include greenhouse gas emissions and removals taking place within national territory and offshore areas over which the country has jurisdiction.”(14) For practical reasons, the IPCC includes only emissions from production.(15)
This is the method that was used for the Kyoto Protocol. There is also an approach based on consumption, which includes emissions from the consumption of imported goods.
The method used has considerable repercussions on the emissions calculated. For example, the use of the production-based method allows industrialized countries to improve their emissions records by relocating production in emerging countries, without reducing their consumption. This “carbon leakage” decreases the effectiveness of local GHG reduction policies.(16)
14. For road transport, emissions are included where the fuel is sold. IPCC, 2006 IPCC Guidelines for National Greenhouse Gas Inventories – Volume 1: General Guidance and Reporting, 2006, p. 1.4.
15. Baptiste Boitier, “CO2 emissions production-based accounting vs consumption: Insights from the WIOD databases,” Final WIOD Conference: Causes and Consequences of Globalization Groningen, April 2012, p. 2.
16. Glen P. Peters et al., “Growth in emission transfers via international trade from 1990 to 2008,” Proceedings of the National Academy of Sciences, Vol. 108, No. 21, May 24, 2011, pp. 8903–8908.