C02 emissions and the Green supply chain is on our minds this week for two reasons.

First, as most know, the US House of Representatives passed a "cap and trade" bill this week, though the fate in the Senate is less certain. If passed, it will result in real costs to businesses and supply chains depending on their level of carbon emissions.

Second, we are about to mail our Supply Chain Digest Letter on the Green Supply Chain, 16 pages focused on just this topic. In this issue, we summarize cap and trade laws, carbon taxes and more in great detail. To ensure this excellent issue arrives at your desk, request a hard copy at: SCDigest Letter on the Green Supply Chain.

As shown in the graphic below, provided by Dr. David Simchi-Levi of MIT and ILOG, an IBM company, the level of carbon emissions by transportation mode does vary dramatically. For example, to move the same amount of freight, trucking creates more than six times the level of C02 versus rail. Ocean transport emits even less. That may mean the relative cost advantage of rail over truck increases even more if there is an additional cost for carbon emissions.

Source: Dr. David Simchi-Levi, MIT and ILOG

The unit of measure is kilograms of C02 emissions per ton of freight moved one kilometer (kg/ton-km). It should be noted that the above numbers do not include getting the freight to and from the rail head, which would somewhat reduce the rail C02 advantage.

How will this play out if cap and trade laws are passsed? No one is quite sure, as we discuss in the Letter.

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