Multi-regional Input Output Research Articles

Evolution and Motivation of the Value-Added Trade Pattern of Producer Services Based on a Complex Network

With the acceleration of the digital revolution and free trade, the producer services industry has become a new driving force for countries to enhance their global value chain (GVC). The further integration of GVCs has promoted the formation of a global value network covering a wider range of regions and industries. The way of establishing strong core capabilities and competitive advantages for a country’s producer services industry in the vast value network is of great practical significance for achieving industrial structure transformation and upgrading in an open economy. Therefore, based on the Asian Development Bank Multi-Regional Input–Output Database (ADB-MRIO) and the bilateral export value-added accounting method (WWZ), this study constructs a value network of producer services and analyzes its structural evolution and driving factors. The results show the following: (1) The domestic value-added (DVA) network and foreign value-added (FVA) networks of producer services trade exhibit dense characteristics in terms of trade depth. The DVA network has a small-world topological structure, while the FVA network does not have this feature most years. (2) Western countries, represented by the USA, Germany, and the UK, are located at the hub of the global value network, while China’s network status is rising and gradually occupying a core position not only in the Asian region but also in the world. The value chain of producer services shows a pattern of being led by developed countries and extending to developing countries. (3) The broader tendency of modularity is decreasing, indicating that the development process of the DVA and FVA networks is becoming globalized. The members of the community can not only achieve trade interdependence due to geographical proximity but also break through regional limitations and complement each other. (4) The network evolution process is driven by a variety of factors. Industrial and technological distances are conducive to the expansion of the global value flow in producer services. Geographical and linguistic proximity are the main influencing factors, while the role of institutional proximity tends to be weakened.

Quantifying consumption-based environmental productivity from “Energy-Environment Footprints”

Addressing the challenge of climate change through accounting is crucial for sustainable development, which is influenced by factors such as productivity growth, technical change, efficiency change, and environmental accounting. However, previous studies have predominantly focused on production-based growth accounting, neglecting the significant impact of consumption on growth accounting levels. In response, this study introduces a synthetic index termed as consumption-based environmental productivity. This innovative index utilizes the Luenberger Productivity Index (LPI) and the Logarithmic Mean Divisia Index (LMDI) models, relying on a Multi-regional Input-output (MRIO) footprint instead of direct emissions. Our empirical research found that from 2000 to 2014, certain economies bore a considerable portion of undesirable emissions imported from abroad. This supports the argument that the footprint approach is a valid alternative to direct emissions assessments. Further analysis revealed an overall growth trend in environmental productivity (EP) of 0.79%. Efficiency change (EC) contributed negatively (-0.35%), while technical progress (TP) positively influenced EP by 1.14%. Additionally, our study points out that reductions in NOX and SO2 emissions were primarily due to energy intensity improvements. Conversely, CO2 emissions were driven by individual production factors and economic growth. These results underscore that establishing clear responsibility for emissions is the foundational step in implementing emission reduction policies in an equitable manner. Concurrently, it is crucial to improve the efficiency of energy consumption and mitigate undesirable emissions to significantly enhance productivity, especially for developing economies, policies should prioritize the development of energy cleanliness and energy efficiency. Furthermore, it is imperative for all economies to refrain from pursuing unnecessary economic growth that could lead to excessive emissions.

Reversing climate policy stereotypes: Evidence from an energy-dependent region and China's major economic circles

Achieving decarbonization and industrial transformation in typical energy-dependent regions is a crucial step in mitigating regional climate change. This study constructed a factorial carbon policy equilibrium effect model (FCEE) that integrated input–output analysis, a computable general equilibrium model, factorial analysis, multi-regional input–output, and ecological network analysis. This work explored the internal impact of a composite carbon tax policy that considered the endogenous driving forces of the socioeconomic system on Shanxi Province, a typical energy-dependent region in China, as well as the cascading external effects on China's major economic circles. A significant interaction was found between carbon tax policy, production efficiency progress, and emission efficiency progress, confirming advantage of the composite policy in terms of the environmental–economic benefits. In contrast to common stereotypes, the composite climate policy will promote the clean transformation of the energy structure and gross domestic product growth, and water scarcity in Shanxi Province will be alleviated under the energy–water nexus mechanism. Relying on complex cross-regional networks, China's economic inequality will be indirectly eased. The economic driving forces of the Yangtze River, Chengdu-Chongqing economic circles, and Shanxi Province will be strengthened, promoting system stability and sustainability. It is recommended that Shanxi Province implement a moderate carbon tax policy while improving production efficiency; the intensity of emissions technology reform can be flexibly adjusted according to actual needs. This study provides evidence to support the implementation of climate policy, which is of great significance for other similar regions looking to solve the dilemma of sustainable development.

Ecological Compensation Scheme for Greywater Footprint Transfer in the Yangtze River Economic Belt Under the Perspective of Environmental Equity

Based on China’s multi-region input–output tables from 2012 and 2017, we measured the greywater footprint and the value-added totals implied by trade within the Yangtze River Economic Belt. Additionally, we constructed an environmental inequity index to analyze the environmental inequity resulting from shifts in the greywater footprint. Finally, we designed and compared two sets of eco-compensation schemes based on the direct and opportunity costs of water resources. The results indicate that: (1) economically developed regions with strong consumption capacities, such as Jiangsu, Zhejiang, and Shanghai, are the primary importers of greywater footprints, whereas the opposite is true for exporters, with most of these regions having a higher GDP (Gross Domestic Product) share from agriculture; (2) a trade phenomenon exists where developed regions leverage their high-value-added industries to exploit underdeveloped regions, exacerbating regional imbalances and hindering the overall coordinated and high-quality development of the region; (3) the direct cost option is less effective than the opportunity cost option in promoting overall regional environmental equity, as the direct cost option fails to account for indirect costs, making the opportunity cost option more advantageous for fostering coordinated regional development.

Tracing embodied CO2 emissions and drivers in China’s financial industry under inter-provincial trade

With the establishment of “Dual Carbon” targets and industrial restructuring in China, the transition from the secondary industry to the tertiary industry has facilitated the rapid development of the financial sector. However, the significant CO2 emissions embodied within inter-provincial trade result in carbon leakage, posing challenges in assigning equitable carbon reduction responsibilities to the financial sectors across the 31 provinces of China. This study establishes a framework for evaluating CO2 emissions of financial sectors through 134 samples of 60 listed financial enterprises in the 31 provinces, tracking the embodied CO2 emissions within inter-provincial trade by using a multiregional input–output approach. The results reveal that the total CO2 emissions of the financial sector in China surged from 4.591 to 12.423 Tg CO2-eq between 2012 and 2020. The regions with the highest annual net CO2 emissions are Anhui (0.244 Tg), Zhejiang (0.242 Tg), and Henan (0.211 Tg). The key factors influencing net CO2 emissions are in the following order of importance: net CO2 density, per capita added value of service industry, the proportion of finances in service industries, and population size. Based on the findings, this study provides policy implications: reducing net carbon intensity, enacting tailored carbon tax policies based on embodied CO2 emissions, and fostering interdepartmental collaboration to address the impact of carbon leakage.

A Novel Decomposition Framework for Agricultural Growth Accounting: A Global Supply Chain Perspective

ABSTRACTIn this article, we delve into the traditionally opaque total factor productivity (TFP) “black box” by dissecting it into its constituent elements—technology and efficiency—based on input–output variables from a global supply chain vantage point. Utilizing growth accounting methods, the article seeks to discern the variety of routes through which technology (frontier movement) and efficiency (catch‐up effects) propagate their effects on TFP. Our primary objective is to identify the most potent mechanism for fostering productivity enhancement, a task that previously eluded systematic examination. The methodology involves creating an empirical approximation of the agricultural production frontier from a selection of national data. Bounded‐adjusted linear programming techniques are subsequently employed to disentangle the observed TFP growth within the agricultural sector of each country into its technology and efficiency facets. It is important to note that this study also integrates resource and environmental footprints as additional input–output variables, quantified via the multi‐region input–output (MRIO) model. The analysis, spanning from 2000 to 2016, reveals that the most advanced nations demonstrate the most vigorous growth in agricultural productivity, with a global upward trend in agricultural productivity over the sampled years.

Official Turnover and Embodied Carbon Emissions: Evidence From Industrial Linkages in China's Prefecture‐Level Cities

ABSTRACTCarbon emission is the most critical environmental pollution issue today. However, regional trade and industrial linkages have changed the traditional carbon emission pattern. As a public product with strong negative externalities, carbon emissions inevitably lead to severe consequences if the market is allowed to adjust itself. Therefore, public policies made by government officials have an important role in environmental governance and emission reduction. This paper uses China's Multi‐regional Input‐Output (MRIO) table and official turnover data of 269 prefecture‐level cities in China for the empirical test. The results show that official turnover has a significant positive impact on embodied carbon emissions between regions. Heterogeneity analysis shows that the inter‐provincial turnover of officials and the turnover between regional central cities results in more significant embodied carbon emissions. Further research finds that the longer the officials stay in their previous positions or as new local government leaders, the greater the embodied carbon emissions caused by their turnover. In addition, the turnover of officials affects interregional embodied carbon emissions by promoting regional entrepreneurship, venture capital and structure transformation of industries. The findings of this paper provide essential enlightenment for optimizing Chinese local government governance and promoting the transformation of the economic development mode.

Analysis of Sustainable Efficiency of Freight Transport in Major European Economies: An Integrated Multi-Region Input-Output and DEA Approach

This paper integrates the multi-region input-output model (MRIO) and data envelopment analysis (DEA) methods to analyze the freight transport efficiency in Europe. Social, economic, and environmental influences were combined into a sustainable efficiency rating of the freight transport sector of Germany, France, Italy, Spain, and the Netherlands. First, the freight transport sector's carbon footprint (CFP) was quantified using the MRIO model. The lifecycle-based CFP emissions of freight transport activities were assessed using a dataset from 2000 to 2018. Nineteen stochastic model-based MRIO lifecycle assessments were built for each country. Secondly, sixty instances of DEA models were created using a linear program for each mode in the selected countries. Thirdly, the sustainable efficiency scores were determined for each freight transport mode in each country over four periods: 2000–2004, 2005–2009, 2010–2014, and 2015–2018. The results illustrate that the sustainable efficiency score of inland, water, and air transport modes ranged from 0.38 to 1.

Metacoupling flow of embodied carbon in resource-based cities: A case study of Hohhot-Baotou-Ordos-Yulin urban agglomeration in China

Quantifying embodied carbon flow is essential for resource-based cities (RBCs) to achieve carbon neutrality and sustainable development goals. However, previous studies have limited understanding of the differences in embodied carbon flows over varying distances, impeding a systematic understanding of these flows in RBCs. Based on the metacoupling theory and the environmentally extended multi-regional input-output (MRIO) model, this study proposed a novel framework that comprehensively depicts local, adjacent, and distant flows of regional embodied carbon. Taking the Hohhot-Baotou-Ordos-Yulin (HBOY) urban agglomeration as an example, we first defined adjacent and distant systems, then quantified the three flow processes of embodied carbon in HBOY using a city-province nested MRIO model. The findings indicated significant differences among the three flow processes. In local flows, Ordos was the only net exporter of embodied carbon, with over half flowing to Hohhot. In adjacent flows, HBOY net imported 7.23 Mt of embodied carbon from nearby regions, while in distant flows, it net exported 165.26 Mt to distant regions. Notably, the embodied carbon imported from the adjacent and distant systems was similar, at 58.17 Mt and 55.06 Mt, respectively, yet the export to the distant system was 4.7 times higher than that to the adjacent system. Nearly four-fifths of HBOY's local carbon emissions are used to satisfy consumption in other regions, which is prevalent in RBCs. Therefore, we recommend that RBCs and their trading partners establish an emission reduction responsibility sharing mechanism aligning duties with benefits, and devise practical carbon compensation schemes and tailored cooperation plans.

Role of global value chain changes in decoupling CO2 emissions from economic growth in Chinese provinces

Global value chain (GVC) changes have had an impact on economic growth and carbon dioxide (CO2) emissions in various provinces. This study links the Chinese provincial multiregional input–output table to the world input–output table. The provinces are divided into carbon peak and nonpeak groups to explore the impact of GVC changes in relation to driving factors of provincial decoupling. The results are fourfold. (1) For peaking provinces, after reaching the peak, the GVC and domestic effects combined to promote strong decoupling. (2) Most nonpeak provinces are weakly decoupling. The hindering effects on decoupling decreased after the 2008 financial crisis. (3) For peaking provinces, the positive effect of emissions intensity has been sufficient to offset the negative effect from the final demand, but was not sufficient to offset nonpeak provinces. (4) The hindering effect of GVC production-related factors has lowered. This study proposes that nonpeak provinces improve production technology.

Beyond greenhouse gases – Comprehensive planetary boundary footprints to measure environmental impact

The planetary boundary framework identifies nine areas of key environmental risk globally. The causes of climate change are well understood as a serious and existential threat; however the other eight areas of concern have a much more limited understanding of what is driving their continued increase.This research utilises Global Resource Input Output Assessment (GLORIA) multiregional input-output (MRIO) tables to map 15 footprint indicators across 51 sectors and seven global regions, identifying key sectors driving planetary boundary impacts and suggesting targeted interventions for sustainability.The relative role of emission intensity and total expenditure is shown, and potential trade-offs and synergies between sectors and indicators are identified. High-impact footprint clusters are identified as food and textiles, and the built environment, with moderate impacts from the services and energy sectors. These relationships are compared to several transformation agendas, identifying overlooked relationships and drivers, including the predominant role of commercial buildings and infrastructure in built environment impacts and the correlation between greenhouse gas emissions and air pollution. The primary driver of plastic use footprints is seen to be the built environment, however as a whole chemical pollution levels remain a significant unknown, and the challenge to globally stop the flow of further dangerous substances and clean up existing contaminated sites is large.By providing a detailed breakdown of planetary boundary drivers this work enables decision-makers to understand the risks and issues associated with economic purchases across all critical environmental pathways simultaneously to better prioritise action for a stable planet.

Identification and Evaluation of Synergy Between Carbon Emissions and Air Pollutants in Inter-Industrial Trade Among Provinces in China

With the vigorous promotion in China of efforts to reduce pollution and carbon emissions, examining their synergies becomes increasingly crucial. This study used the multi-regional input–output (MRIO) table to build the consumption-based industrial emissions inventories of CO2 and three major air pollutants (PM2.5, NOx, and SO2) and constructed synergistic emission indices of the intensity and magnitude to identify and evaluate the synergy between carbon emissions and air pollutants in inter-industrial trade among 30 provinces in mainland China. The results show that more than 85% and 40% of inter-provincial and inter-industrial trades have synergistic emissions between CO2 and air pollutants, respectively. We identified 77 inter-provincial trades and 84 inter-industrial trades among provinces with strong synergistic emissions. They are mainly reflected in the demand of the construction industry in Zhejiang and Guangdong for the nonmetal mineral products manufacturing industry in Henan, and the metal smelting and processing industry in Hebei, along with the demand of the service industry in Beijing for the electric power, steam, and hot water production and supply industry in Inner Mongolia. Our study provides new insights into the synergistic reduction of CO2 and air pollutants within the supply chain, thereby enriching the discourse on regional and industrial synergies in achieving sustainable development goals.

Enormous inter-country inequality of embodied carbon emissions and its driving forces in South America

South America is a crucial developing region under significant pressure to reduce emissions and achieve carbon neutrality. This study fills a vital gap by comprehensively analysing the continent’s carbon emissions from both production and consumption perspectives. Utilizing the most up-to-date global Multi-Regional Input-Output (MRIO) models, we examine the emissions embodied in the internal and external trade of nine major South American countries, tracing the emission flows from their origins to final consumers and analyzing the socio-economic drivers behind these patterns. Our analysis reveals that regions bearing heavier burdens of energy-intensive production often face exacerbated economic disparities. Trade-related emissions are embodied in heavy industry and transportation, and the share of emissions attributable to developing countries is continuously climbing. Brazil is the sole net-exporter of emissions, while Colombia has become a significant net importer. Energy intensity offsets the increase in carbon emissions caused by per capita consumption, especially in Brazil. Meanwhile, Colombia experiences an increase in emissions due to its energy structure, whereas a general trend towards decreasing emissions is noted elsewhere. The impact of the industrial chain is mainly domestic and extends forward along the supply chain. Interestingly, the consumption structure reduces emissions in Argentina and Bolivia, but increases them in other countries. Key emission mitigation initiatives include Brazil enhancing its leadership in bioenergy, Chile intensifying the development of green industrial chains for high-emission sectors, and Uruguay advancing its wind energy projects to increase clean energy exports, etc. These measures could facilitate targeted and effective decarbonization while promoting equitable and sustainable economic development across South America.

Assessing the impacts of fertility and retirement policies on China’s carbon emissions

The gradual adjustment of fertility and retirement policies in China has social benefits in terms of coping with population aging. However, the environmental consequences of these policies remain ambiguous. Here we compile environmentally extended multiregional input–output tables to estimate household carbon footprints for different population age groups in China. Subsequently, we estimate the age-sex-specific population under different fertility policies up to 2060 and assess the impacts of fertility and retirement policies on household carbon footprints. We find that Chinese young people have relatively higher household carbon footprints than their older counterparts due to differences in income by age group. Relaxing fertility policies and delaying retirement age are associated with an increase in population (and labour supply) and thus increases in household carbon footprints, with the majority of these increases from the fertility side. These results may help policymakers understand interactions among those measures targeting population aging and climate action.

Visualising trade-related virtual urban land transfers in China

ABSTRACT As a type of environmental footprint, the concept of virtual land captures the indirect land use embedded in our consumption and trade activities. Utilising the environmentally-extended multi-regional input–output model (EEMRIO) and Kaleidoscope diagram, we visualise for the first time the interprovincial flow of virtual urban land in China. It unveils the intricate urban network connections and the telecoupled interactions between human activities and land use amidst China's rapid urbanisation phase. The results indicate that the eastern region of China emerges as the primary net beneficiary of virtual urban land, whereas the western region stands as the principal net contributor. The local urban land in 65% of the provinces suffices for their own consumption demands. However, provinces like Zhejiang, Henan, and Jiangsu rely heavily on inter-provincial urban land to fulfil their consumption requirements. Inter-regional trade plays a pivotal role in facilitating the flow of land resources, significantly easing the strain between human demands and land availability in the developed coastal provinces of eastern China. Yet, it imposes additional ecological pressure on the more ecologically vulnerable areas in the west. The insights from this research are poised to offer valuable guidance for the Chinese government in harmonising urban development strategies, industrial distribution and the allocation of construction land on a national scale.

EXIOBASE energy accounts: Improving precision in an open‐sourced procedure applicable to any MRIO database

AbstractAs environmentally extended input–output tables are increasingly used for footprint and supply chain analysis, there has been a growing demand for precise, reliable, and intertemporally consistent environmental accounts. Energy accounts are particularly relevant. As well as providing insights into embodied energy, in the case of the multi‐regional input–output (MRIO) database EXIOBASE, they are the basis of the air emissions from fuel combustion. In this study we review previous methods and provide a more integrated and robust implementation for the EXIOBASE energy accounts that ensures higher levels of consistency between economic and physical data. Our results show that the new procedure significantly improves the precision of the energy use coefficients and multipliers, while reducing the number of outliers. The procedure is made publicly available for full transparency and made open source such that users and developers may raise issues and suggest improvements to the procedure. Furthermore, the procedure is standardized so it can be applied to any MRIO model with only minor adjustments to the input data.

Regional Economic Development, Climate Change, and Work Force in a Gender Perspective in Chile: Insights from the Input–Output Matrix

Most nations fulfilled the commitment to reduce their emissions after the Paris Climate Agreement, and as a result, each nation has produced suitable plans to reach those goals. In this sense, Chile is hardly an exception. The emission multiplier product matrix (eMPM) and labor multiplier product matrix (lMPM), which are associated with the gender differences in the labor market, a state-of-the-art technique that integrates CO2 emissions with multi-region input–output table (MRIO) databases and elasticity to estimate the pollution caused by inter-industrial activity in the nation’s various north, center, and south regions, are used in this article to analyze the emissions of Chilean industries. This approach, by studying the economic territorial consistency (ETC) issue, is expected to establish a connection between each region’s production structure and interregional relationships between gender and the main industries that produce emissions. Indeed, the study aims to determine which regions foster economic development from an equitable perspective through the ETC study. The ETC in Chile depends on some variables, such as labor force, gender and CO2 emissions. The improvement in terms ofion will depend on the use of technology and the proper state regulation in line with the promises gained by Chile following the convening of COP25.

Exploring carbon footprints and carbon intensities of Indonesian provinces in a domestic and global context

Within Indonesia, the structure of consumption and production differs significantly across provinces. This implies that carbon footprints and intensities between provinces are also diverse. This paper calculates historical consumption- and production-based carbon emissions at the provincial level using a multi-scale input-output (IO) database for 2010, in which an environmentally extended multi-regional IO (EE MRIO) table for 34 Indonesian provinces is integrated in the global EE MRIO EXIOBASE with data for 43 countries and 5 rest of the world regions. Emissions from consumption are detailed by product and their points of origin, while emissions from production are detailed by industry and their destinations. Our results show the heterogeneity of Greenhouse Gas (GHG) emissions under both sides. The Java region is a net importer of carbon emission, while Sumatra and Kalimantan are net exporters. In the global context, the Asia Pacific region plays important role in national GHG emissions. Services product contributed 57.1% of national consumption-based GHG emissions, followed by manufacture (30.6%), and agriculture (12.3%). On the national level, 63.5% of national GHG emissions are related to household consumption. There is a high disparity across provinces in Indonesia in carbon footprints. Provincial average per capita carbon footprints vary from 2 t CO2e/capita in East Nusa Tenggara to 13.84 t CO2e/capita in East Kalimantan. Carbon intensity also varies from 0.83 kt CO2e/M Euro in Jakarta to 2.37 kt CO2e/M Euro in North Kalimantan. Agriculture and food products dominate household carbon footprints, while construction leads in government carbon footprints. Utilities and transportation services play important roles on national carbon intensities. We further correlated the Human Development Index (HDI) with per capita carbon footprints and expenditure, and find that provinces with similar GHG emissions and expenditure per capita income as Java, tend to have a lower HDI. Understanding development status and province-level characteristics is important for selecting policy strategies.

Examining global biodiversity accounts: Implications of aggregating characterization factors from elementary flows in multi‐regional input–output analysis

AbstractExtending multi‐regional input–output (MRIO) models with spatially explicit life cycle impact assessment (LCIA) models allows practitioners to quantify biodiversity impacts at every step of global supply chains. Inconsistencies may be introduced, however, when high‐resolution characterization factors (CFs) are aggregated so as to match the low spatial granularity of MRIO models. These aggregation errors are greater when CFs are aggregated via proxies, such as ecoregion land shares, instead of based on spatially explicit elementary stressor flows. Here, we describe our approach to tailoring application‐specific CFs for use in MRIO studies. We apply a global agricultural production model, Spatial Production Allocation Model (MapSPAM), with the LCIA database, LC‐IMPACT, to create crop‐specific national CFs. We investigated i) if the differing aggregation approaches and the increased spatial explicitness of the constructed CFs deviate substantially from those in LC‐IMPACT, and ii) what the resulting consequences for national production and consumption‐based biodiversity footprints are when combining the tailor‐made CFs with the EXIOBASE MRIO model. For the year 2020, we observe an increase in global production‐based biodiversity impacts of 23.5% for land use when employing crop‐specific CFs.

Economic and environmental impacts of the shifts to electromobility in Spain: A multiregional input–output framework

AbstractThe decarbonization of transport is a key goal facing climate change. The electrification of the powertrain for passenger cars is part of this goal to reduce carbon emissions. This involves a big change in the global supply chain, specifically in countries with a high weight of the traditional automotive sector, such as Spain, where above 10% of the GDP comes from this industry. There is a forecasted shift from the sector of traditional automotive parts to the electric sector, where batteries and electric components will be the major part of the powertrain. This work evaluates socioeconomic and environmental impacts of the changes in the car industry from the ramp‐up of the electric vehicles market in Spain, and also in the European Union and the rest of the world. To do it, we use an environmentally extended multiregional and multi‐sectoral input–output model. Our simulations include the technological change and demand shifts estimated to achieve the penetration of electric vehicles up to 2030 and 2050. The results show significant impacts on employment and economic indicators by 2050, when the share of electric vehicles is expected to increase up to a relevant level.