State-Backed Firms Emit 7.5 Billion Tons of Carbon a Year, Study Finds

(Bloomberg) -- Some countries have a powerful lever to curb emissions and channel investment into clean technologies, with relatively little red tape. The governments can target their own state enterprises.

Nearly 300 state-owned enterprises — government-backed businesses that produce everything from electricity to steel and cement — emit greenhouse gases equivalent to at least 7.5 billion metric tons of carbon dioxide every year, according to a study released Thursday from Columbia University's Center on Global Energy Policy. Chinese SOEs were responsible more than 5 billion tons, or 69% of estimated total, followed by Russia and India at close to 4% each. More than two dozen other nations had smaller shares.

“State ownership provides these governments with a major direct point of control over the climate and energy outcomes of these companies,” authors Alex Clark and Philippe Benoit wrote. “Improving the measurement of SOEs' contribution to both national and global-level emissions provides important information to help understand to what extent SOEs should be targeted.”

Governments also have the ability to directly influence emissions from private companies through procurement contracts. Public sector purchases are responsible for 15% of global emissions, according to a separate report from the World Economic Forum and Boston Consulting Group released this week. Governments currently spend $11 trillion on procurement every year, making it a crucial tool for reducing greenhouse gases.

The report published by Columbia University focused on SOEs for which the researchers could find data. The authors said they probably underestimated actual carbon pollution associated with the nearly 300 state-run companies because many national oil firms and iron and steel manufacturers don't report emissions. Their assessment was more than 1 billion tons of CO₂ greater than a previous study by one of the authors.

It's estimated that there are more than 100,000 SOEs globally but emissions disclosures vary widely, making it difficult to compile a comprehensive list, according to the researchers.

Power generation accounted for about 85% of emissions, according to the study, followed by contributions from oil and gas production and distribution, transport, cement and chemicals. Chinese SOEs were responsible for three-quarters of power sector emissions, with the country's five-biggest electricity producers accounting for a fifth of emissions across all sectors.

Estimates by the Centre for Research on Energy and Clean Air found in October that many of China's companies pollute more than entire nations. For instance, China Baowu, the world's top steelmaker, put more CO₂ into the atmosphere in 2020 than Pakistan, and Sinopec Group unit China Petroleum & Chemical contributed more to global warming than Canada, itself an emissions heavyweight.