Detailed breakdown of companies carbon footprints per origin of emissions using distributed input output analysis

A new approach based on input–output (IO) analysis has emerged recently to estimate the carbon footprints of companies and their products from cradle to gate, using a distributed iterative framework with all companies interacting to solve the high dimensionality IO linear system. Earlier papers have proposed to compute the footprint of a company as a single value, or to decompose it into three components accumulating separately primary and secondary Scope 1/2/3 data. This paper shows the distributed framework can be generalized to decompose the footprint of a given company into the additive contributions of all other companies of its upstream value chain, or into the aggregated contributions of any predefined partitioning of them. In practice, the distributed framework can be applied to predefined coarse-grain decompositions into countries and economic sectors taking part in the company's value chain. The single value footprint or the Scope1/2/3 accumulation footprints proposed in previous papers are two special cases of the general framework. In addition, we derive from the fine-grain decomposition at company level a loopback probing scheme to estimate the double counting inherent in the footprint of any company, or more interestingly, of any group of companies. We illustrate the model on macroeconomic data for 44 sectors and two regions (Europe and Rest of World), using the Inter-Country Input–Output database from the OECD. Future research will need to evaluate the framework on representative field data. Finally, we discuss the merits and limitations of the distributed framework compared to a centralized framework based on digital billing.