But the real implications of the new paper could come in international climate policy. The U.N. system is built around the idea of capping carbon emissions from individual nations. But which country is responsible for the carbon emitted in global trade? The buyer or the seller? The study demonstrates that carbon leakage — emissions moving from relatively green countries like France or Germany to more carbon-intensive ones like Russia or China — is already occurring. The question is whether the leakage will accelerate if, for instance, developed nations institute tough carbon caps and drive out carbon-intensive industries, which will set up in uncapped developing nations — as cap-and-trade opponents allege. Or has any leakage that will occur already occurred? If industry hasn't already been outsourced from developed nations due to their higher labor costs and other disadvantages, a carbon cap may not make a difference. "The study definitely cuts both ways," says Davis.

What's clear is that for all the blame being put on major developing countries for failing to take on carbon regulations, climate change is still chiefly the responsibility of rich nations. We emitted most of the man-made CO2 currently warming the planet, and even today, thanks to trade, we are still responsible for the majority of new carbon emissions. As Davis and Caldeira write, "Consumption-based accounting of emissions provides grounding for ethical arguments that the most developed countries — as the primary beneficiaries of emissions and with greater ability to pay — should lead the global mitigation effort." That's hard to argue with.

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