The CO2 Content of Consumption Across US Regions: A Multi-Regional Input-Output (MRIO) Approach

Abstract

We improve on existing estimates of the carbon dioxide (CO2) content of consumption across regions of the United States. Using a multi-regional input-output (MRIO) framework, we estimate the direct and indirect CO2 emissions attributable to domestically and internationally imported goods. We include estimates of bilateral trade between US states as well as between individual states and international countries and regions. This report presents two major findings. First, attributing emissions to states on a consumption versus a production basis leads to very different state-level emissions responsibilities; for example, when attributed on a consumption basis, California's per capita emissions are over 25 percent higher than when attributed on a production basis. Second, when attributing emissions on a consumption basis, heterogeneity of emissions across trading partners significantly affects emissions intensity. These findings have important implications for evaluating the potential distributional impacts of national climate policies, as well as for understanding differing incentives to implement state- or regional-level policies.