The carbon footprint of the U.S. multinationals\u2019 foreign affiliates

Luis-Antonio López,María-Ángeles Cadarso,Jorge Zafrilla,Guadalupe Arce

doi:10.1038/s41467-019-09473-7

Luis-Antonio López, María-Ángeles Cadarso + Show 2 more

Open Access

https://doi.org/10.1038/s41467-019-09473-7

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Abstract

Multinational enterprises (MNE) need to be a part of the solution in the fight against climate change, as claimed by investors and consumers, reducing emissions within their operations and supply chains. This paper measures the carbon footprint of U.S. MNE foreign affiliates (US-MNE) operating beyond the U.S. borders. Using a multiregional input-output model and information about US-MNE activities, the US-MNE carbon footprint ranks US-MNE as the 12th top emitter of the world. In relative terms, one dollar of value added generated by US-MNE affiliates operating abroad requires higher emissions than the domestic average and the ratio increases when only developing host countries are considered. Only 8% of total carbon footprint returns to the U.S. as virtual carbon embodied in the U.S. final consumption. Potential technology transfers between the U.S. parent company and affiliates to reduce US-MNE carbon footprint have been performed to evaluate potential rippled effects of mitigation actions.

Highlights

Multinational enterprises (MNE) need to be a part of the solution in the fight against climate change, as claimed by investors and consumers, reducing emissions within their operations and supply chains
The activity of U.S. MNE foreign affiliates (US-MNE) beyond U.S borders accounts for 0.5082 GtCO2, which represents 9.8% of U.S producer responsibility (PR) and 8.6% of the U.S consumer responsibility (CR), and 1.5% of the world’s global emissions during 2009 (Fig. 1)
The amount of the foreign affiliates US-MNE carbon footprint was estimated using the value added generated by the US-MNE abroad as an indicator of the generation of burden shifted income and emissions

Summary

Introduction

Multinational enterprises (MNE) need to be a part of the solution in the fight against climate change, as claimed by investors and consumers, reducing emissions within their operations and supply chains. A significant part of the environmental impacts of many firms are generated beyond their borders along their global value chains (GVCs) but are driven and enhanced by those firms’ decisions Those decisions represent opportunities for emission reductions, such as the following: creating sectoral standards that use incentives or sanctions to help operationalize codes of conduct across the global supply chains[20,21,22]; choosing suppliers intensive in low carbon technologies[23], because of the global environmental benefits these technologies present[2]; choosing more environmentally friendly distributors (downstream) with less income-based carbon emissions[24]; transferring of technology to their suppliers/partners in other countries[25]; or designing products and improving existing ones to minimize material and energy use[26], facilitating a circular economy[27].

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