The supply chain of CO₂emissions

Abstract

CO 2 emissions from the burning of fossil fuels are conventionally attributed to the country where the emissions are produced (i.e., where the fuels are burned). However, these production-based accounts represent a single point in the value chain of fossil fuels, which may have been extracted elsewhere and may be used to provide goods or services to consumers elsewhere. We present a consistent set of carbon inventories that spans the full supply chain of global CO 2 emissions, finding that 10.2 billion tons CO 2 or 37% of global emissions are from fossil fuels traded internationally and an additional 6.4 billion tons CO 2 or 23% of global emissions are embodied in traded goods. Our results reveal vulnerabilities and benefits related to current patterns of energy use that are relevant to climate and energy policy. In particular, if a consistent and unavoidable price were imposed on CO 2 emissions somewhere along the supply chain, then all of the parties along the supply chain would seek to impose that price to generate revenue from taxes collected or permits sold. The geographical concentration of carbon-based fuels and relatively small number of parties involved in extracting and refining those fuels suggest that regulation at the wellhead, mine mouth, or refinery might minimize transaction costs as well as opportunities for leakage.carbon intensity of economy | emissions embodied in trade | emissions from traded fuels | international incidence of carbon price A nthropogenic climate change is driven by CO 2 emissions from the burning of fossil fuels (1, 2), which are generally attributed to the country where the emissions are produced (i.e., where the fuels are burned) (3). However, these productionbased accounts differ substantially and increasingly from consumption-based accounts of where goods associated with emissions are ultimately consumed, primarily because of exports from China and other emerging markets to consumers in developed countries (4-8). In addition, fossil fuel resources are more geographically concentrated than energy demand, and therefore, fuels burned to generate energy have, in many cases, been extracted far from the point of combustion and resulting CO 2 emissions (9). As a result, goods and services consumed in one country are commonly produced in another country using fossil fuels extracted in a third country. Understanding the distribution of interests along this supply chain may facilitate international efforts to limit CO 2 emissions from the burning of fossil fuels. The distribution of emissions along the supply chain also has important implications for the international incidence of the economic burden of a given climate policy. Given these implications, we present results from a model that tracks global CO 2 emissions from the source of extracted fossil fuels through the production of emissions during combustion of those fuels to the consumption of goods and services related to those emissions to generate a consistent set of accounts that span the global supply chain of CO 2 emissi...

Global inequities and emissions in Western European textiles and clothing consumption

“…High level studies of global trade typically find that international trade has shifted pollution into developing countries that have used manufacturing and heavy industry to fuel their growth (Davis et al, 2011;Kanemoto et al, 2014;Peters et al, 2011b).…”

Sharing a quota on cumulative carbon emissions

“…First, committed emissions (orange bars in Fig. 2) are estimates of future emissions from existing CO 2 -emitting infrastructure that will continue for infrastructure lifetimes without early retirement [42][43][44] …”

Material efficiency: providing material services with less material production

“…Thus, any reported gain in UK material efficiency, measured by the economic ratio, would disguise the true worsening of the UK's physical material efficiency. Davis et al [40] demonstrated that this phenomenon is not limited to the UK, and report the balance of trade of CO 2 for 11 countries, strongly re-inforcing the conclusion that production-based figures are a poor indicator of a nation's environmental impacts. A further complication from the difference between economic and physical measures of material efficiency arises when the word 'material' is used to describe the intermediate inputs of production, rather than physical materials.…”