The Supply Chain of CO2 Emissions (Paper)

This is a document reviews supply chain issues related to CO2 emissions. It was written by Steven J. Davisa, Glen P. Petersb, and Ken Caldeiraa at the Department of Global Ecology, Carnegie Institution of Washington, Stanford, and bCenter for International Climate and Environmental Research–Oslo (CICERO). This document considers CO2 on a broader level than simply looking at the countries in which fossil fuels are burned.

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.

This document includes a consistent set of carbon inventories that spans the full supply
chain of global CO2 emissions. As reviewed in the PDF, 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.

These 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.

Click here for an interactive graphic on CO2 emissions.

To view The Supply Chain of CO2 Emissions (PDF) click here.