Environmental efficiency and equality embodied in China's inter-regional trade

Abstract

Embodied emissions in trade have been widely studied; however, there is still a lack of studies that explore whether a country is benefitting from its inter-regional trade in terms of pollutant emissions. This study took sulfur dioxide (SO2) emissions as an example and employed modified input-output (MIO) model and traditional input-output (IO) model to quantify emissions under no-trade and trade conditions, and further investigated environmental efficiency and equality of inter-regional trade in China in 2010. The results show that inter-regional trade had increased emissions by 28% compared to no-trade emissions, which confirms the environmental inefficiency of inter-regional trade in China. This was largely because regions with better technology and low emission intensities tended to outsource the production of pollution-intensive but low value-added goods to regions with high emission intensities through inter-regional trade. The exchanges of pollution-intensive products in inter-regional trade have led to notable environmental inequities. Eastern regions usually gained the greatest environmental benefits from trade, while central regions (especially Shanxi, Henan, and Hebei) suffered the largest environmental loss induced by trade. Specifically, Guangdong plundered other regions the most (796 G gram (Gg)), while Shanxi was plundered the most by other regions (790 Gg). Polices to differentiate reduction criteria for emission intensity in different regions and adjust trade patterns within China could be recommended in order to achieve trade-related environmental efficiency as well as environmental equality.