Author: Grace Enjia Xu
Editors: Elizabeth Li, Joanna Xu
Artist: Grace Enjia Xu
When talking about greenhouse gas emissions, we automatically visualize smoggy gray skies, exhaust fumes from the tailpipes of cars, or the clay pipes of factories emitting smoke. But in reality, sources of carbon emissions may not always be as simple as we think. Instead, these emissions can be differentiated into two categories: direct emissions and indirect emissions. Direct emissions are created by an individual product or person, while indirect emissions refer to emissions related to the individual person or firm. For example, indirect emissions refer to carbon emissions from electricity, heating, or energy that are considered as emissions from a company, but are not directly produced by the company but by another entity. How does this work?
Many companies may emit both direct and indirect carbon or greenhouse gas emissions. For companies that only produce indirect emissions, their predominant source is the energy and electricity they use. Electricity generated through unsustainable methods can create “unclean” energy that is then used during the production of a commodity. These indirect emissions are also accounted for because they still cause negative externalities and consequences even if the company did not generate them. A prevalent source of indirect emissions in the production process would inevitably be electricity. Electricity, a commonly used energy source for production, can be generated in various ways. From commonly seen natural gas, coal, and fossil fuels to sustainable, innovative energy sources of hydropower, solar, geothermal wind, etc., there are various production methods for producing electricity. Therefore, based on the affordability and accessibility of specific energies, different countries and states distribute their electricity in various ways to best accommodate their economy and limits.
Take the state of California as an example. California in 2021 had only 0.2% of its electricity generated by coal, 50.2% of electricity generated by natural gas, and 34.8% of its electricity generated through renewable energy sources like solar and wind. On the other hand, in the province of Jiangsu, China 81.37% of its electricity is generated by gasoline, which takes up 5.68% of China’s entire coal electricity generation. This drastically different energy generation distribution is not only the result of the sole difference in affordability but also closely intertwined with the climate and accessibility of generating electricity in a certain way. California’s arid and sunny weather is an absolute advantage in producing solar electricity, unlike Jiangsu’s humid weather.
With the rise of more carbon taxes and tariffs on products to reduce carbon emissions during the production process, companies in Jiangsu would greatly suffer more than California companies from their reliance and limited accessibility to only the cheap but heavily coal-generated electricity they use. Even companies that produce solar panels or lithium batteries, which do not create any direct emissions during the production process, may face the challenge of being taxed for using unsustainable electricity generated by coal. These indirect emissions that are emitted through generating unclean electricity will then impact all types of “zero emissions sustainable products” like electric cars, auto-driving cars, solar panels, and lithium batteries do not have zero emissions. Instead, products may have zero emissions during usage but not precisely zero emissions during production because of the electricity they use.
Overall, a complete sustainable electricity generation system hardly exists today because the generation of electricity anyone uses is likely a combination of sustainable and unsustainable energies that cannot be traced down. These unsustainable electricities that emit carbon dioxide into the air cannot be simply eliminated or replaced because, under current technology it is still very difficult to reach the complete goal of zero emissions in any economy. Many companies may face greater challenges with carbon tariffs in the future if they are limited to only using less sustainable electricity produced by the local government. To mitigate the issues of indirect carbon emissions and reduce potential carbon taxes on products, companies that are situated in places using mainly unsustainable energy will need to supply their own electricity through wind or solar power.
Citations:
“2021 Total System Electric Generation.” California Energy Commission, California Energy
total-system-electric-generation. Accessed 22 Oct. 2024.
Indirect Emissions from Purchased Electricity, www.epa.gov/sites/default/files/2020-
12/documents/electricityemissions.pdf. Accessed 23 Oct. 2024.
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