The supply chain of CO2 emissions
Steven J. Davis, Glen P. Peters, and Ken Caldeira
The CO2 emissions that drive anthropogenic climate change are generally attributed to the country where the emissions are produced (where the fossil fuels are burned). However, goods and services as well as fossil fuels may be transported internationally, meaning that CO2 emissions may not be correctly traced back to the accountable nation. In this study, we follow the global supply chain of CO2 emissions, from the source of extracted fossil fuels, through the release of emissions during combustion of those fuels, to the consumption of goods and services related to those emissions.
Ken Caldeira - click here to read the video transcript
CO2 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 CO2 emissions, ﬁnding that 10.2 billion tons CO2 or 37% of global emissions are from fossil fuels traded interna- tionally and an additional 6.4 billion tons CO2 or 23% of global emissions are embodied in traded goods. Our results reveal vul- nerabilities 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 CO2 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.
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