Climate policy and solutions for green supply chains: Europe’s predicament

Abstract

Purpose – This paper aims to measure carbon footprints (CFs) of products at the sectoral levels. The paper also aims to provide potential solutions to adopt greener supply chains to minimise CFs. Design/methodology/approach – The assessment of CFs uses a data set for nine sectors and environmental extended input output tables, as well as other six models. The analysis uses modules for regional economy, freight, logistics and mode choice, among other modules. The output of these modules includes increases or cuts in carbon dioxide (CO2) emissions following a shift in supply chains. Findings – The authors identify five supply chains that are closely connected to the growth of CFs. The highest CF is found for the electronics and textiles products. Offshoring manufacturing capacity produces an increase of emissions (production and freight transport sectors) of 42 million tonnes of CO2 emissions, or 12 per cent of the Kyoto target of 341 million tonnes of CO2. Using a different metric to measure emissions, offshoring the same volume of production appears as a reduction in European Union (EU)-wide CO2 emissions. To reduce CO2 emissions, the authors propose a carbon tax on imports, increasing R&D subsidies to industry and freight sectors and on-shoring a greater volume of production into the EU economies, among other measures. Research limitations/implications – This paper only measures CFs at the sectoral level. Further work should include survey data on CFs, longer historical data series and larger set of products for assessment. Another limitation is the lack of analysis of freight transport flows of non-EU regions, (i.e. China and Latin America). Practical implications – The authors propose the following measures: at least five policies to offset offshoring of production, several measures to reduce carbon emissions, propose introducing mandatory audits for CFs and mandatory labelling. This work has implications for carbon taxation of exports and imports in an effort to decarbonise European and global supply chains. Social implications – Social implications include the need to lower personal goods consumption in the EU to minimise the impact of supply chains on carbon emissions; the need to tax exports/imports may have an impact on jobs in the EU, among other effects. Originality/value – This paper is the only study that uses the TRANS-TOOLS model and the only study to measure CFs of products within the context of freight transport flows within the EU. The analysis relies on inputs from several modules that apply data on 24 EU economies.