(02 December 2021) As governments and businesses aim to reduce carbon footprint to meet climate targets, measuring carbon emissions at global, country, and corporate levels has become extremely important. A key tool designed to reduce carbon footprint is carbon pricing/taxation, in which a government sets a price (or a carbon tax) that emitters must pay for each ton of greenhouse gas emissions they emit. Existing carbon pricing schemes tax only current carbon flows, but what about carbon emissions of the past? Who should pay for these? 

Using Global Carbon Atlas data on fossil fuel CO2 emissions for more than 200 countries over the last sixty years, we have created a "true" ranking of carbon emissions by country that ranks countries by accumulated, rather than annual, emissions. Here are the key findings:

  • Countries that were already significantly industrialized in the second half of the 20th century rank higher in accumulated carbon emission than they do in annual carbon emission rankings.
  • China, which is the largest carbon emitter on an annual basis, with 32% of global CO2 emissions in 2020, accumulated 23% less CO2 emissions from 1960 to 2020 than the U.S.
  • On an accumulated basis, the world's largest CO2 emitter is the U.S., which is responsible for 22% of global CO2 emissions in the sixty-year period from 1960 to 2020. China's share in global accumulated carbon emissions, 17%, is just over half its share in global annual emissions.

Looking at emissions this way might provide a more realistic framework for carbon tax rate calculations. For example, let's assume a scenario in which all countries use the same method of calculation to determine their carbon tax rates. If accumulated emissions are used as the basis for this rate calculation, countries with high current emissions but low historic emissions will have a lower tax burden than they would if current annual emissions were used as the basis for the tax rate. This means, for example, that the value of carbon tax paid by businesses (and, indirectly, consumers) in China would be almost 50% lower with an accumulated emissions calculation than it would be if carbon tax were calculated on an annual emissions basis.

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