When most of us think about carbon dioxide (CO₂) emissions, we picture smokestacks from power plants or factories. But climate policy designers see emissions not only in ephemeral gases at the point of origin, but also in tangible objects at the point of sale or trade. From their vantage point, all commercial products contain “embodied emissions” that were produced in their manufacture, assembly and transport—and these CO₂ emissions must be carefully accounted for at the state or national level to ensure that border-crossing climate policies such as carbon pricing measures are effective.

To save on computation time and expense in this accounting, policymakers typically aggregate embodied emissions data by sectors such as power, transportation and agriculture. In interstate and international climate policy design, this approach is commonly used in assigning emissions reduction requirements and penalties (e.g. border carbon adjustments (BCAs)) based on energy and emissions embodied in consumption and trade. Depending on which classification system is used to define sectors, however, such aggregation could introduce significant inaccuracy into the calculation of total embodied emissions at the state or national level. This inaccuracy, in turn, could lead to biased assessments of the effectiveness and cost of interstate or international carbon emissions reduction measures.

Now a study by researchers at or affiliated with the MIT Joint Program on the Science and Policy of Global Change explores the roots of this inaccuracy, the conditions that impact its magnitude, and aggregation strategies that policymakers can use to minimize it. Published in the Journal of Industrial Ecology, the study presents a pathway to more accurate and consistent estimates of embodied emissions—assessments more likely to inspire the confidence of signatory states and nations considering proposed emissions reduction policies, such as BCAs, that target embodied emissions.