Accounting for Greenhouse Gas Emissions Associated with the Supply of Fossil Fuels

SEI Discussion Brief

Author(s): Erickson, P. ; Lazarus, M.
Year: 2013

This discussion brief explores how an extraction-based emissions accounting tracks and accounts for the emissions associated with fossil fuels as they are brought into the world economy, and the implications of taking such an approach.

Current climate policies and accounting frameworks for climate change mitigation focus largely on the demand, or use, side of the fossil fuel equation. GHG emissions inventories quantify the emissions associated with fossil fuel use by each country or entity. Climate policies such as emissions trading systems or emissions standards tend to regulate or price GHG emissions at the point of fossil fuel combustion (e.g. power plants or industrial facilities) or distribution (oil and gas supply).

This demand-side focus leads to a conundrum: countries (and individual entities) can increase fossil fuel supply and infrastructure, potentially locking-in substantial future emissions, with often little effect on their own emissions accounts. Generally, the only carbon emissions attributed to fossil fuel production are those emitted when energy is used to locate, extract, process, and transport fuel – usually a small amount. Countries that are large net exporters of fossil fuels can thus greatly increase their fossil fuel extraction activities with limited impact on their own GHG emissions. Yet clearly, increasing the production of fossil fuels can pose a threat to achieving global climate change mitigation goals.

Complementary analytical frameworks that better account for the GHG implications of existing and new fossil fuel supplies could help to address this conundrum.

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