Energy and water embodied in China–US trade: Regional disparities and drivers

Abstract

Energy and water support the three pillars of sustainable development—the economic, the social, and the environmental—in that they enable poverty reduction, job creation, and human well-being in general. A multiregional input–output model (MRIO) is established to estimate the flows of embodied energy and virtual water in China–US trade in 2015. Then, a structure decomposition analysis (SDA) model is used to analyze the factors affecting the differences in embodied energy and virtual water in China–US trade. There are three notable findings: (1) The net exported embodied energy in China is 94.41 Mtoe (million tons of oil equivalent), and the net exported virtual water is 4.48 Bm3 (billion cubic meters), among which Guangdong province exports the most embodied energy (17.01 Mtoe) and Jiangsu province exports the most virtual water (2.58 Bm3); these exports are mainly concentrated in the metal and nonmetal product sector (embodied energy) and the agriculture sector (virtual water). (2) From the embodied energy perspective, the input–output structure effect (63.93 Mtoe) plays the most important role in increasing the embodied energy differences. However, the final demand per capita (−20.93 Mtoe) is the largest negative factor decreasing the differences in the export of embodied energy. (3) From the virtual water perspective, the input–output structure effect (2.41 Bm3) plays the most important positive role in increasing the differences between China and the US; in contrast, the final per-capita demand (−1.78 Bm3) is the most important negative factor for decreasing the differences in virtual water.