Integration of the Human Development Index into carbon accounting to enhance the equity and efficiency of emission allocations

Abstract

An equitable and efficient carbon emission responsibility allocation is key to climate change negotiations. This paper proposes a new Human-Development-Index (HDI)-based Accounting (HBA) framework that addresses countries’ historical responsibility for carbon emissions and their mitigation capacity. HBA mandates sharing trade-related carbon emissions: import-oriented emissions are allocated to consumers in proportion to their HDI, with producers bearing the remainder. Crucially, HBA ensures that developed countries bear the majority of trade-related carbon emissions when relocating energy-intensive production to emerging economies. Our empirical study shows that the economies with higher HDI and per capita carbon emissions are assigned significantly higher carbon emission responsibilities under HBA than under production-based accounting (PBA), such as the USA and major European economies. In 2014, HBA increased the USA and EU responsibilities by 1713 and 257 Mt, respectively, over PBA, while reducing them by 50 and 32 Mt, respectively, relative to consumption-based accounting (CBA). Moreover, from 2005 to 2014, an increasing HDI lowered HBA burdens in developed countries (e.g., the USA \downarrow8%). Despite higher carbon intensity of the GDP, emission responsibilities under HBA in emerging economies will increase with HDI growth (e.g., China \uparrow 15%). However, HBA can incentivize cleaner supply-chain investments, alleviate development pressures on emerging economies, and promote global sustainable development. As a result, HBA provided a more equitable, efficient, and sustainable carbon accounting framework.

Graphical abstract

Keywords

Human Development Index / Carbon emission accounting / Common but differentiated responsibilities / Beneficiary-pays principle / HDI-Based Accounting

Highlight

	● A new carbon accounting based on the Human Development Index (HDI) is proposed.
	● HDI reflects historical responsibility for carbon emissions and mitigation capacity.
	● Our study confirms the method promotes equity, efficiency, and sustainability.
	● The method aligns with the principle of common but differentiated responsibilities.

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