Abstract
We take a network-based measure of emissions responsibility and investigate its implications for strategic behaviour and emissions reduction. The measure propagates direct emissions upstream through the network, allocating responsibility across agents according to their sourcing structure. We first study how responsibility responds to changes in the network, and then introduce the Emissions Responsibility Game (ERG), in which agents strategically choose their emission intensities and sourcing weights to minimize a cost that combines responsibility and abatement effort. When the network is fixed, we establish the existence of a unique Nash equilibrium and provide comparative statics with respect to abatement costs, baseline emissions, and the discount factor. When sourcing is endogenous, however, a closed-form characterization of the equilibrium vector appears analytically intractable due to nonlinear network feedbacks. We nevertheless derive a sufficient condition under which switching to a cleaner supplier reduces responsibility. Finally, we bring the model to data using global input-output tables from 1995–2020, examining changes in responsibility, centralization, and emissions reductions. Taken together, our results highlight how network- based responsibility can shape incentives for abatement and for sourcing from cleaner supply chains.