Editor’s Note: We all know that globalization can never be sustainable. Localization is imperative for a just and sustainable world. Yet, proponents of globalization have created an emissions accounting system that argues that importing goods is better than sourcing locally. Sector-based accounting calculates the carbon emissions caused by a product in the given area. So, for example, if you are consuming a product that was produced across the world, sector-based accounting would only calculate the carbon emissions in your area, so excludes the production process and transportation. Here is a video about how our “stuff” is produced in a globalized world. It gives a fair idea of what a sector-based accounting system fails to account for.

The following is a piece about the implementation of sector-based accounting in Vermont.

Emissions Accounting System Favors Imported Goods

By Steven Gorelick/VT Digger

Now that the COP28 climate change conference has concluded, it’s time for a quick climate change quiz. See if you can identify the climate hero in the scenario below:

Jared and Annette arrive at a potluck, each bringing a mixed salad with the same ingredients. By a strange coincidence, they’re also wearing identical Christmas sweaters. They compare notes, and it turns out that Annette’s salad ingredients were all bought from Vermont farmers, while Jared’s are supermarket ingredients shipped here from California, Mexico and Chile. Annette’s sweater was knit by a local craftsperson using Vermont wool. Jared’s came from Walmart, and was produced in a Chinese sweatshop using electricity from a coal-fired power plant.

Question: Which one is doing their part to lower their greenhouse gas emissions?

Answer: Jared.

Crazy? Indeed. But if you read Environmental Action Network’s(EAN) “Annual Progress Report on Emissions” you’ll discover that Vermont’s emissions are counted in a way that makes Jared the environmental hero, while Annette just isn’t “doing her part.”

That’s because EAN uses what’s known as “sector-based accounting” to tally our emissions. Emissions from various sectors of the Vermont economy are added up, and that’s our total. Anything produced in Vermont — like Annette’s sweater and the ingredients in her potluck dish — add to that total, but emissions from goods that came from outside Vermont are ignored. So by EAN’s accounting, Jared’s supermarket and Walmart purchases — though loaded with greenhouse gas emissions — add nothing at all to Vermont’s total.

The emissions embedded in a sweater or salad may seem trivial, but even in a small state like ours they’ll be multiplied by nearly a billion. Consumer spending in Vermont amounted to $31 billion in 2019, most of that for out-of-state products. Consider everything Vermonters bought at chain stores — Walmart, Dollar General, Target, Home Depot, 7-Eleven, etc. Add to that all the fast food purchased at McDonalds, Burger King, Pizza Hut and Wendy’s, and all the coffee sold at Starbucks. Add in all the purchases from Amazon, eBay, and other online sellers. Few if any of these goods were produced in Vermont, and so the emissions from producing them and transporting them here are absent from EAN’s tally. The same illogic applies to most of the food in Vermont’s supermarkets: zero emissions, no matter how many tons of CO2 were emitted to grow, process, and transport it to Vermont.

It’s hard to see how intelligent climate policies can be crafted using an emissions accounting system that implicitly favors imported goods over locally produced goods. Even local food – which should be embraced as a climate strategy because of its lower food miles and reduced need for packaging — is a loser according to sector-based accounting.

There’s an alternative accounting method that does incorporate consumption, and not surprisingly it’s called consumption-based accounting. For Vermont, it would mean tallying up the emissions from everything we consume — no matter where it came from. (The emissions from Vermont exports would be excluded because those emissions are the responsibility of an end consumer elsewhere.)

Consumption-based accounting makes it clear that the best way to reduce emissions is to reduce consumption, period. By forcing us to take responsibility for our emissions, it’s a first step towards meaningful climate action.

Governments avoid consumption-based accounting, perhaps because it challenges the bedrock belief that economies should grow forever. Most mainstream non-profits don’t use consumption-based accounting either — maybe because their donor bases hope the climate can be “fixed” while leaving the growth-driven consumer economy — the source of their wealth — intact.

In any case, EAN and its “network members” – including the Vermont Natural Resources Council(VNRC), Vermont Public Interest Research Group(VPIRG), and other large Vermont environmental NGOs — are among those groups that ignore consumption. Instead, they see climate change as a problem for which technofixes are the solution. And with sector-based accounting there’s a technofix for every sector: industrial “renewables” for the electricity sector, EVs for transport, heat pumps for thermal, etc. These technologies don’t require changing our consumer-based economic system; on the contrary, they represent huge profit-making opportunities for corporations and wealthy individuals. As one prominent renewable energy advocate put it, climate change is “the largest wealth creation opportunity of our lifetimes”.

Some will argue that asking citizens to rein in their consumption would be unfair to the many Vermonters who already live with little. But the upper-income levels are where reductions are most needed. A recent Oxfam report titled “The Great Carbon Divide” reveals that a “polluter elite” is responsible for a huge share of global emissions: “it would take about 1,500 years for someone in the bottom 99% to produce as much carbon as the richest billionaires do in a year.”

Low-income Vermonters aren’t chartering private jets out of Burlington’s airport, nor do they have second and third homes with heated swimming pools and three-car garages.

The EAN report calls to mind a line from Mark Twain: “there are three kinds of lies: lies, damn lies, and statistics”. EAN’s report is loaded with creatively presented statistics, but it omits one of the most important statistics of all — consumption. In that way, EAN’s report serves to maintain the growth of an economic system that is literally killing the planet.

Photo by Eric Chen on Unsplash