Possibilities for Compensation of Climate-Friendly Products - Basic Considerations for Allocation Methods

  • Project no.1172 E

Apart from production-related greenhouse gas emissions (GHG), many industrial sectors may as well be characterised by the manufacturing of goods, which help to save energy and corresponding emissions during their use-phase (like insulating or lightweight materials).

With the implementation of ambitious climate protection goals, this leads to the following problem: On the one hand, strong GHG reduction targets have to be imposed on the industrial sectors. On the other hand, a point of view considering lifecycle-wide climate protection requires encouraging the production of certain goods or even the establishment of entire industries with an appropriate portfolio of low-carbon products.

This leads to the question if it is possible to implement compensating mechanisms for the production of climate-friendly products. It has to be considered how such mechanisms could be developed and if, for example, a credit could be granted to certain branches of industry when determining GHG reduction targets.

Taking into account the afore-mentioned challenge (to balance climate protection targets and the attractiveness of production sites), this short study encompasses the following aspects:

  • Description and analysis of assessment and compensation procedures by means of two exemplary methods: Regional import-/export-balances and product-based credits;
  • Considerations for a possible implementation of compensation mechanisms in the context of the climate protection plan of the state of North Rhine-Westphalia as a starting-point for further political discussions.

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