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The supply chain of CO2 emissions
Edited by William C. Clark, Harvard University, Cambridge, MA, and approved September 13, 2011 (received for review May 9, 2011)

Abstract
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.
- carbon intensity of economy
- emissions embodied in trade
- emissions from traded fuels
- international incidence of carbon price
Footnotes
- ↵1To whom correspondence should be addressed. E-mail: sjdavis{at}carnegie.stanford.edu.
Author contributions: S.J.D. and K.C. designed research; S.J.D. and G.P.P. performed research; S.J.D. and G.P.P. contributed new reagents/analytic tools; S.J.D., G.P.P., and K.C. analyzed data; and S.J.D., G.P.P., and K.C. wrote the paper.
The authors declare no conflict of interest.
Data deposition: The data reported in this paper are available at http://supplychainCO2.stanford.edu.
This article is a PNAS Direct Submission.
This article contains supporting information online at www.pnas.org/lookup/suppl/doi:10.1073/pnas.1107409108/-/DCSupplemental.
Freely available online through the PNAS open access option.
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