Consumption-Based Emissions in International Climate Law (in Russian)

This article was prepared by Alexey Nikitin, Researcher in Public International Law at Climate and Environment at ICLRC, for Climate Bulletin (Issue 42).

The Climate Bulletin is a collection of analytical articles on sustainable development. It is prepared by the team of Gazprombank’s Center for the Implementation of Sustainable Development Principles with contributions from authors of the International and Comparative Law Research Center and invited experts.

Recent years have seen an increased interest in the discsussion whether greenhouse gas emissions should be accounted for not only on a territorial (production‑based) basis, but also on a consumption‑based basis. In 2024–2025, the International Court of Justice, the EFTA Court, and the Inter‑American and European Courts of Human Rights joined this discussion. Although their conclusions are rather fragmented (each approached the issue from its own angle), they share one overarching idea: States bear responsibility for emissions embodied in the production of goods they import. On the one hand, this conclusion enables net exporters of carbon‑intensive products to argue for a fairer allocation of climate responsibility between producers and consumers. On the other hand, it also lends legitimacy to measures adopted by net importers of embodied emissions to restrict carbon‑intensive imports, such as the EU Carbon Border Adjustment Mechanism (CBAM).

In the multilateral climate regime, greenhouse gas emissions have traditionally been accounted for on a territorial (production‑based) basis. In other words, emissions associated with the production of a good (hereinafter “embodied emissions”) are attributed to the country on whose territory they occur, even if the good is subsequently exported for use (consumption) abroad.

Because of its simplicity, this principle has dominated State practice in greenhouse gas inventories for more than three decades. It does, however, have shortcomings. First, in a sense, it encourages “carbon leakage”: emissions reductions in one country are accompanied by an increase in another. This is because the principle does not account for a country’s contribution to climate change caused by emissions embodied in the production of the goods that it imports. Since these “imported embodied emissions” are not counted, an importing country has an incentive to adopt measures that shift its production abroad and then import the same goods that were previously produced domestically. By facilitating carbon leakage, the territorial principle reduces the effectiveness of global mitigation efforts. Second, the territorial principle is not entirely fair, because it effectively places the burden of reducing embodied emissions solely on producing (exporting) countries, even though consuming (importing) countries are also beneficiaries of trade.

Over the past decade, these shortcomings have fuelled the debate on whether emissions should be accounted for not only on a production basis, but also on a consumption basis, in order to reflect States’ carbon footprints more accurately. Consumption‑based emissions are already calculated annually at the level of the European Union,¹ the OECD,² and by some of their member States.³ In 2022, Sweden’s parliament even proposed setting a separate target —to reduce, by 2045, greenhouse gas emissions calculated on a consumption basis—though the target was ultimately not adopted. Finally, in 2025, the BRICS Contact Group on Climate Change and Sustainable Development developed principles for carbon‑footprint accounting systems. Under these principles, responsibility for emissions should be distributed between producers and consumers, rather than placed entirely on one party.⁴ In recent years, international courts have also contributed to this debate.

Findings of International Courts

In its advisory opinion delivered in July 2025, the International Court of Justice (“ICJ”) stated that climate‑change‑causing conduct includes both production and consumption.⁵ It further noted that a breach of international law may consist in a failure to take sufficient measures to protect the climate system from greenhouse gas emissions, including through the production and consumption of fossil fuels.⁶ The ICJ also considered it important that States provide for climate impact assessments for particularly large projects, for instance in order to understand their downstream effects.⁷

The EFTA Court went even further in May 2025, when it clarified the requirements of EU Directive 2011/92/EU on environmental impact assessment. In the Court’s view, in the context of climate impacts an assessment should not be confined to effects directly caused by an (oil‑and‑gas) project at the time and place of its implementation. Where necessary, it should also cover the project’s long‑term effects, including in other countries or globally, such as the greenhouse gas emissions resulting from the combustion of oil or gas extracted under the project.⁸

The Inter‑American Court of Human Rights (“IACtHR”), which likewise issued an opinion in May 2025, approached the issue from a different angle. It considered that, when setting national mitigation targets, consumption‑based emissions, and not only production based emissions, may be a factor to be taken into account.⁹ The Court also observed that States Parties to the American Convention on Human Rights should adopt legislative and other measures requiring companies to audit their activities for compliance with environmental and human‑rights requirements (due diligence processes with regard to environmental and human rights matters). Such audits should also cover both domestic and overseas supply chains.¹⁰

The European Court of Human Rights (“ECtHR”) briefly touched on this issue in its judgment in KlimaSeniorinnen Schweiz v. Switzerland, delivered in April 2024. It noted that Switzerland’s embodied emissions constitute a significant component of its carbon footprint (70% in 2015). The Court further observed that, in this context, it would be impossible to discuss Switzerland’s responsibility for the impact of its greenhouse gas emissions on the applicants’ rights without taking embodied emissions into account. Ultimately, however, it made no findings on the merits of Switzerland’s responsibility for its embodied emissions.¹¹

What Do We Have in the Final Analysis?

On the one hand, international courts’ statements on embodied emissions are quite fragmented. The ICJ, in general terms, noted that not only production but also consumption of fossil fuels may give rise to responsibility under international law (we should emphasize that “may give rise” does not mean “always gives rise”). The ECtHR applied this general point to a specific State — Switzerland — although it did not reach conclusions on the merits. The ICJ also pointed to the need for climate impact assessment of particularly large planned projects, and the EFTA Court developed this idea further by stressing that such assessment should cover long‑term effects of projects in other countries as well. The IACtHR, for its part, identified embodied emissions as one possible factor when setting national mitigation targets and called for measures requiring corporate activity audits broadly similar to the EU’s recently adopted Corporate Sustainability Due Diligence Directive (CSDDD). All this suggests that embodied emissions were not at the center of international courts’ attention when they rendered their decisions: each addressed those aspects it found relevant and most important in the context of its own decision.

On the other hand, although these statements are fragmented, they do not contradict, but rather complement one another. Moreover, a common thread clearly emerges: international judicial practice is moving towards recognizing import and consumption as factors relevant to the fulfilment of States’ climate obligations. This somewhat challenges conventional assumptions about where one State’s responsibility ends and another’s begins. At the same time, the conclusion that a State bears responsibility for its embodied emissions flows naturally from the proposition that it must take all measures at its disposal to protect the climate system from anthropogenic greenhouse gas emissions. If reasonable measures to reduce embodied emissions are available to a State — something that is especially true for wealthy net importers of embodied emissions — then such measures must be adopted.

Finally, it should be noted that this conclusion is not unequivocally advantageous for net exporters of embodied emissions. On the one hand, it enables them to partially recalibrate the allocation of responsibility for their large territorial emissions. On the other hand, it effectively legitimises measures to restrict carbon‑intensive imports, such as the EU’s Carbon Border Adjustment Mechanism (CBAM) — measures that net exporters of embodied emissions consistently view with hostility.

1 Thus, in 2023 the EU’s consumption-based emissions amounted to over 4 Gt CO₂-eq, whereas production-based emissions were 3.3 Gt CO₂-eq. See: https://ec.europa.eu/eurostat/statisticsexplained/index.php?title=Greenhouse_gas_emission_footprints

2 See: https://www.oecd.org/en/data/datasets/greenhouse-gas-footprint-indicators.html

3 Including, for example, Canada: https://www.canada.ca/content/dam/eccc/documents/pdf/cesindicators/carbon-dioxide-emissions-consumption-perspective/2025/greenhouse-gas-emissions-consumptive%20perspective.pdf, as well as the Nordic countries: https://pub.norden.org/temanord2024-545/3-consumption-based-emissions-in-the-nordic-countries-.html

4 See the explanations to Principle 5 (Cooperation): https://brics.br/en/documents/environment-climate-energy-and-disaster-risk-reduction/250528_brics_climate-leadership-agenda_principles-fair-inclusive-transparent-carbon-accounting.pdf/

5 Advisory Opinion of the International Court of Justice on the obligations of States in respect of climate change, para. 94.

6 Ibid., para. 427. The Court also referred to the provision of subsidies and the granting of licences for activities related to fossil fuels.

7 Ibid., para. 298.

8 Advisory Opinion of the EFTA Court at Norway’s request in the context of Greenpeace Nordic and Nature and Youth Norway, paras. 82–84.

9 Advisory Opinion of the Inter-American Court of Human Rights on the climate emergency and human rights, No. OC-32/25, para. 328.

10 Ibid., para. 348.

11 Judgment of the European Court of Human Rights in KlimaSeniorinnen Schweiz v. Switzerland, paras. 279–280.