Emerging product carbon footprint standards and schemes and their possible trade impacts

Concern over climate change has stimulated interest in estimating the total amount of greenhouse gasses produced during the life-cycle of goods and services - i.e. during their production, transportation, sale, use and disposal. The outcome of these calculations is referred to as "product carbon footprints" (PCFs).

The paper reviews the rationale, context, coverage and characteristics of emerging standards and certification schemes that estimate and designate PCFs, and discusses the possible impacts on trade, particularly exports from distant and developing countries. It draws on a survey of PCF certification schemes carried out during 2009, on a review of evolving international and national standards, and on a review of consumer surveys.

Since 2007 one public standard, and two public and 14 private certification schemes referring to standards for calculating and communicating PCFs have become operational. Two new international standards and several new schemes, including three public ones, are due to become operational by 2011 or earlier.

The private schemes are owned by a mixture of voluntary bodies and private companies, including some large retailers. Many provide assistance for reducing carbon footprints or procedures for certification or labelling. Nonetheless, to date only a few thousand products have been footprinted. As PCFs are already becoming market access requirements for bio-fuels imported to the EU, and may also become EU market access requirements for all mass-produced goods within 10-15 years, there is a danger that developing country exporters will lose out as a result.

This is because: they are less likely to have the resources necessary for calculating and verifying PCFs; publicly available datasets are less likely to include processes carried out mainly in developing countries; and some existing standards do not currently include production of capital goods in their definition of product life cycles, which imparts a bias against labour-intensive production methods and hence against typical developing country exports.

In contrast, PCF standards and schemes did not discriminate against products from distant countries, since emissions from long-distance transport were not treated differently from those generated by other activities in the product life cycle.