Carbon 'hotspots' in global supply chains: an inter-regional input-output analysis

Inter- and multi-region input-output methods are increasingly applied to account for carbon emissions under a consumption accounting ‘footprint’ perspective. However, at least in the short- to medium-term – and certainly in the context of the Paris 2015 UNFCCC COP 21/ CMP 11 meetings – international policy focus remains on the production accounting perspective of territorial emissions generated within individual nations. However, this paper argues that there continues to be an important role for the application of environmental inter-regional input-output (EIRIO) accounting methods and application of consumption accounting perspectives in understanding the economic pressures driving point source emissions that are of concern from a production/territorial perspective. Drawing on the OECD inter-country input-output tables, we demonstrate by decomposing standard EIRIO headline calculations of production and consumption perspective emissions. We show how this facilitates consideration of down-stream demands driving the production of output and associated emissions of carbon at specific industrial ‘hotspots’ within individual regions/territories.