Embodied carbon emissions in the supply chains of multinational enterprises

Zengkai Zhang, Dabo Guan (), Ran Wang, Jing Meng (), Heran Zheng, Kunfu Zhu and Huibin Du ()
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Zengkai Zhang: Tianjin University
Dabo Guan: Tsinghua University
Ran Wang: University of International Business and Economics
Jing Meng: University College London
Heran Zheng: Norwegian University of Science and Technology
Huibin Du: Tianjin University

Nature Climate Change, 2020, vol. 10, issue 12, 1096-1101

Abstract: Abstract Enterprises are at the forefront of climate actions and multinational enterprises (MNEs) engage in foreign direct investment, allowing them substantial influence over the entire supply chain. Yet emissions embodied in the international supply chains of MNEs are poorly known. Here we trace the carbon footprints of foreign affiliates of MNEs and show that the gross volume of global carbon transfer through investment peaked in 2011, mainly driven by the decline in carbon intensity. Despite declining carbon footprints of developed country-based MNEs, there has been a notable increase in carbon transfer sourced from the Chinese mainland. We propose an investment-based accounting framework to allocate carbon footprints of MNEs to the investing country. Investment-based accounting of emissions could inform targeted and effective climate policies and actions. For instance, some large MNEs play a crucial role in carbon transfer, therefore their originating country should bear more responsibilities of carbon emission reduction as an investor.

Date: 2020
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DOI: 10.1038/s41558-020-0895-9

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