“One of the easiest ways for the United Kingdom to meet its carbon reduction targets,” stated the Liberal Democrat peer Lord Teverson in 2010, “is to send offshore even more of its manufacturing and high-carbon-based industry.”
Teverson’s words were intended as a warning rather than a recommendation. But it appears the Government has been following such advice for the past twenty years.
As the graph below illustrates, UK emissions as they are ‘officially’ recorded by the Government, have been going down. But real UK emissions – the total once you factor in emissions embedded in the goods we consume from overseas – continue to rise.
UK greenhouse gas emissions on a consumption basis.
Source: Dieter Helm, Too Good to Be True?, 2007
The Government knows this, but it’s keeping schtum. It realises that acknowledging the problem of outsourced emissions would place it in a bind, on two counts. Firstly, it would give the lie to all previous declarations of progress towards cutting emissions. And secondly, it would have to admit that the link between growth and emissions has not yet been broken – merely that we’ve moved a big chunk of emissions ‘off-balance sheet’.
It’s not as if the Government hasn’t received good advice on this issue. Defra’s Chief Scientific Advisor, Bob Watson, has highlighted the ongoing rise in outsourced emissions, stating publicly, “We’ve got to be more open about this.” David MacKay – who is now Chief Scientific Advisor at the Department of Energy and Climate Change – wrote about outsourced emissions in his 2008 book, Sustainable Energy Without the Hot Air, stating, “Should we ignore the energy cost of making [a product]… because it’s imported? I don’t think so.”
But it gets worse. Not only is the Government ignoring good advice; it’s also being hypocritical. Because every time it’s quietly murmured about the problem of outsourced emissions, it’s advocated honesty to be the best policy.
Take the UK’s Sustainable Development Strategy, for example. Praised when it was published in 2005 as a world-leading example of commitment to sustainability, its condemnation of ‘outsourcing’ emissions was unambiguous. “There would be little value in reducing … environmental impacts within the UK,” it declared, “if the results were merely to displace those impacts overseas or close off benefits at home or abroad.”
The same point was made in the Cabinet Office’s Food Strategy, released in July 2008. Discussing how best to reduce the environmental impacts of food consumption, it stated:
“A coherent approach is required [for agricultural emissions reduction]: having fewer animals and less use of fertilisers would reduce UK greenhouse gas emissions from farming, but nothing will be gained by applying mitigation measures on UK or EU farming if food supply is simply displaced to overseas producers and there is no overall improvement in global emissions… The EU needs to give greater attention to addressing emissions from livestock and to finding a way of doing so without simply ‘exporting’ production of livestock products.”
The UK Low Carbon Transition Plan, published by the Department of Energy and Climate Change (DECC) in July 2009, also reaches the same conclusions. “Agricultural products are traded internationally. So in reducing emissions in the UK we need to make sure that we do not simply transfer the problem to other countries.” Yet this is precisely what has happened to date; not only in the agricultural sector, but also in manufacturing.
Worse still, there is an obvious way the Government could start addressing outsourced emissions, but has so far failed to do so. As with any addiction, the first step to beating it is admitting it exists. Rather than cook the books, why not simply count outsourced emissions in the UK’s national greenhouse gas inventory, which is released annually?
This is, after all, what various Government-commissioned reports have recommended. The Food Climate Research Network, a Defra-funded organisation, proposed in 2008 whilst the Climate Bill was being debated:
“The Bill does not take into account emissions embedded in imported goods and services… if these were included we would see a very different picture of the UK’s progress… In our opinion a consumption-based view more accurately captures the actual impacts of UK activities.”
And the Stockholm Environment Institute, concluding a report commissioned by Defra into outsourced emissions three years ago, suggested:
“an 'embedded CO2 indicator' showing a time series of CO2 emissions from a consumption perspective… should be considered for publication with official UK statistics, alongside already existing greenhouse gas emission trends. This would give a more complete picture of emissions induced by UK economic activity.”
The final ignominy – the last nail in the coffin of any Government pretence that it remains ignorant of this issue – is that Ministers themselves are fully aware of the problem of outsourced emissions. It’s not that civil service Sir Humphreys have been keeping their masters in the dark. We now know this because of a series of Freedom of Information requests made recently by PIRC. The responses we have received show that Ministers in DECC, Defra and BIS have been briefed on the subject repeatedly over the past few years. Yet they have done nothing.
The Coalition Government has committed itself both to being the ‘greenest government ever’ – and to radical transparency in how it presents public data. It understandably maligns off-balance sheet accounting when it comes to public finances. It claims to be looking into the reprehensible offshore tax dodging practices of multinational companies. If it is to avoid being laughably hypocritical, it needs to take the scandal of outsourced emissions equally seriously.
Guy Shrubsole is Director of Public Interest Research Centre.
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