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The Role Of Input-Output Analysis For The Screening Of Corporate Carbon Footprints

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  • Y. Anny Huang
  • Manfred Lenzen
  • Christopher Weber
  • Joy Murray
  • H. Scott Matthews

Abstract

In developing a standardised approach for companies to inventory greenhouse gas (GHG) emissions along their value chains, key challenges identified by stakeholders and technical experts include: which emissions sources a company should include in their inventory and how to calculate them, what constitutes a full list of indirect supply chain activities, and how to determine which activities from such a list are significant by application of a cut-off threshold. Using GHG accounting based on input-output models from Australia and the United States, this work presents specific case study examples and general results for broad industry sectors in both economies to address the development of a complete upstream carbon footprint for screening purposes. This is followed by an analysis of the issues surrounding application of cut-off thresholds and the relationship with system capture rate and efforts in carbon footprint analysis. This knowledge can inform decision makers about where to expend effort in gaining progressively greater accuracy for informed purchasing, investing, claiming carbon credits, and policy-making. The results from this work elucidate several findings: while it is probably true that some companies will know what sources contribute most significantly in the supply chain, this is not likely to be true for all. Contrary to common perception, scope 1&2 emissions are not always more significant than scope-3 sources, and, for some sectors, the largest sources of emissions may be buried further upstream than many companies may have previously perceived. Compiling a list of core elements of significance across all sectors may be problematic because these elements are not necessarily significant for most sectors. Lastly, the application of cut-off thresholds results in highly variable performance in footprint capture rate and is not a reliable criterion for including emission sources in GHG footprints. Input-output analysis is a powerful tool in informing supply-chain GHG accounting, and there is a need for plain language education, training, support materials and information to be made easily accessible to a global business community.

Suggested Citation

  • Y. Anny Huang & Manfred Lenzen & Christopher Weber & Joy Murray & H. Scott Matthews, 2009. "The Role Of Input-Output Analysis For The Screening Of Corporate Carbon Footprints," Economic Systems Research, Taylor & Francis Journals, vol. 21(3), pages 217-242.
    • Handle: RePEc:taf:ecsysr:v:21:y:2009:i:3:p:217-242
    DOI: 10.1080/09535310903541348
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    Cited by:

    1. Zhen, Wei & Zhong, Zhangqi & Wang, Yichen & Miao, Lu & Qin, Quande & Wei, Yi-Ming, 2019. "Evolution of urban household indirect carbon emission responsibility from an inter-sectoral perspective: A case study of Guangdong, China," Energy Economics, Elsevier, vol. 83(C), pages 197-207.
    2. Wang, Saige & Chen, Bin, 2018. "Three-Tier carbon accounting model for cities," Applied Energy, Elsevier, vol. 229(C), pages 163-175.
    3. Zhen, Wei & Qin, Quande & Zhong, Zhangqi & Li, Li & Wei, Yi-Ming, 2018. "Uncovering household indirect energy-saving responsibility from a sectoral perspective: An empirical analysis of Guangdong, China," Energy Economics, Elsevier, vol. 72(C), pages 451-461.
    4. Wang, Xi & Cai, Hua & Florig, H. Keith, 2016. "Energy-saving implications from supply chain improvement: An exploratory study on China's consumer goods retail system," Energy Policy, Elsevier, vol. 95(C), pages 411-420.
    5. Timo Busch & Matthew Johnson & Thomas Pioch, 2022. "Corporate carbon performance data: Quo vadis?," Journal of Industrial Ecology, Yale University, vol. 26(1), pages 350-363, February.
    6. Liziane Araújo da Silva & Ana Regina de Aguiar Dutra & José Baltazar Salgueirinho Osório de Andrade Guerra, 2023. "Decarbonization in Higher Education Institutions as a Way to Achieve a Green Campus: A Literature Review," Sustainability, MDPI, vol. 15(5), pages 1-17, February.
    7. Acquaye, Adolf A. & Yamoah, Fred A. & Feng, Kuishuang, 2015. "An integrated environmental and fairtrade labelling scheme for product supply chains," International Journal of Production Economics, Elsevier, vol. 164(C), pages 472-483.
    8. Cisneros-Pineda, Alfredo & Hertel, Thomas W. & Baldos, Uris Lantz C. & Chaudhary, Abhishek, 2023. "Can Productivity Growth Contribute to Biodiversity Preservation? The Role of International Trade," 2023 Annual Meeting, July 23-25, Washington D.C. 335902, Agricultural and Applied Economics Association.
    9. Jukka Heinonen & Seppo Junnila, 2011. "A Carbon Consumption Comparison of Rural and Urban Lifestyles," Sustainability, MDPI, vol. 3(8), pages 1-16, August.
    10. Dong, Huijuan & Geng, Yong & Xi, Fengming & Fujita, Tsuyoshi, 2013. "Carbon footprint evaluation at industrial park level: A hybrid life cycle assessment approach," Energy Policy, Elsevier, vol. 57(C), pages 298-307.
    11. Talbot, David & Boiral, Olivier, 2013. "Can we trust corporates GHG inventories? An investigation among Canada's large final emitters," Energy Policy, Elsevier, vol. 63(C), pages 1075-1085.
    12. Llop, Maria & Ponce-Alifonso, Xavier, 2015. "Identifying the role of final consumption in structural path analysis: An application to water uses," Ecological Economics, Elsevier, vol. 109(C), pages 203-210.
    13. Meng, Xiaoge & Yao, Zhong & Nie, Jiajia & Zhao, Yingxue & Li, Zenglu, 2018. "Low-carbon product selection with carbon tax and competition: Effects of the power structure," International Journal of Production Economics, Elsevier, vol. 200(C), pages 224-230.
    14. Su, Bin & Ang, B.W. & Li, Yingzhu, 2019. "Structural path and decomposition analysis of aggregate embodied energy and emission intensities," Energy Economics, Elsevier, vol. 83(C), pages 345-360.
    15. Mikel Perales Jarillo & Luis Pedraza & Pablo Moreno Ger & Elvira Bocos, 2019. "Challenges of Online Higher Education in the Face of the Sustainability Objectives of the United Nations: Carbon Footprint, Accessibility and Social Inclusion," Sustainability, MDPI, vol. 11(20), pages 1-15, October.
    16. Lenzen, Manfred & Murray, Joy, 2010. "Conceptualising environmental responsibility," Ecological Economics, Elsevier, vol. 70(2), pages 261-270, December.
    17. Li, Yingzhu & Su, Bin & Dasgupta, Shyamasree, 2018. "Structural path analysis of India's carbon emissions using input-output and social accounting matrix frameworks," Energy Economics, Elsevier, vol. 76(C), pages 457-469.
    18. Louise Laumann Kjaer & Niels Karim Høst-Madsen & Jannick H. Schmidt & Tim C. McAloone, 2015. "Application of Environmental Input-Output Analysis for Corporate and Product Environmental Footprints—Learnings from Three Cases," Sustainability, MDPI, vol. 7(9), pages 1-24, August.
    19. Popescu, Ioana-Stefania & Gibon, Thomas & Hitaj, Claudia & Rubin, Mirco & Benetto, Enrico, 2023. "Are SRI funds financing carbon emissions? An input-output life cycle assessment of investment funds," Ecological Economics, Elsevier, vol. 212(C).
    20. Ju, Yiyi & Fujikawa, Kiyoshi, 2019. "Modeling the cost transmission mechanism of the emission trading scheme in China," Applied Energy, Elsevier, vol. 236(C), pages 172-182.
    21. Zhen, Wei & Qin, Quande & Qian, Xiaoying & Wei, Yi-Ming, 2018. "Inequality across China's Staple Crops in Energy Consumption and Related GHG Emissions," Ecological Economics, Elsevier, vol. 153(C), pages 17-30.

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