Caldeira Lab

The Supply Chain of CO2 Emissions

Steven J. Davis, Glen P. Peters & 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.

Davis, S. J., G. P. Peters, and K. Caldeira, 2011: The Supply Chain of CO2 Emissions. Proceedings of the National Academy of Sciences, 18554–18559, doi:10.1073/pnas.1107409108108.

Ken Caldeira - click 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 internationally and an additional 6.4 billion tons CO2 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 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.


Figure: Millions of tons (Mt) of CO2 in trade in 2004. Regional differences between where fossil fuels are extracted and where goods and services that are supported by those fuels are ultimately consumed, quantified by CO2 emissions (i.e. the net effect of emissions from traded fossil fuels and embodied in goods and services). The arrows depict largest interregional fluxes of emissions (Mt CO2 y-1) from net exporting countries (blues) to net importing countries (reds); the threshold for arrows is 200 Mt CO2 y-1. Fluxes to and from Europe are aggregated to include all member states of the EU-27.

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