Emissions in a decarbonised economy? Global lessons from a carbon footprint analysis of Iceland

Decarbonisation of stationary energy supply, particularly electricity grids, is the current focus of climate change mitigation policy. However, studies have suggested that this narrow policy focus is insufficient to achieve meaningful global emissions reductions. Using Iceland as a case study, this paper demonstrates that significant emissions arise from transport and imported products, which are often not fully captured in territorial GHG inventories. This results in high greenhouse gas emissions per capita regardless of the nation's domestic energy supply. The result is a low carbon illusion in which rich economies believe they are reducing their GHG responsibility whilst global emissions continue to grow. This paper presents the first consumption-based carbon footprint (CBCF) analysis for Iceland, a nation where the stationary energy supply is 99% renewable, and could be viewed as a decarbonisation ‘future case’ for rich nations globally. The study combines Icelandic household expenditure data with the Multi-Regional Input-Output database Eora to calculate the CBCF of Icelandic households. The average annual CBCF of Icelandic households was 10.4 tCO₂eq/capita, similar in magnitude to other EU nations despite Iceland's unique energy supply. GHG emissions from transport, food and goods dominated the household CBCF. The national CBCF was higher than most European nations and 55% higher than the territorial emissions inventory. Approximately 71% of household emissions were attributed to imported goods, which were mapped globally revealing that the GHG emissions burden of Icelandic consumption falls primarily on developing nations. The findings suggest that a broader GHG accounting framework and resulting policy focus is required, both in Iceland and globally, that incorporates both supply and demand-based GHG reduction strategies.