Carbon productivity and value-added generations: Regional heterogeneity along global value chain

Abstract

The increasing production fragmentation increases the complexity of measuring the environmental losses and economic gains from trade not only at country level, but also at regional level. By extending the decomposition method of global value chain into regional level, we decompose the value added and embodied emissions by province of China into three components occurred at different stages along the value chains: trade in final products, trade in intermediate products for the last stage of production, and trade in intermediate products for the remaining stages of production. We then examine the pollution haven effect at the regional level, by comparing carbon productivity (CP) that is defined as the value added per unit of embodied emissions by type of demand and by province at different stage along the value chain. Results show that participation in domestic value chains is more conducive to a “carbon-efficient” development mode. More attentions should be paid to evaluating the pollution haven effect at regional level and different stages along global value chains.