Multi-regional Input Output Research Articles

Building a baseline to better integrate air passenger and air freight transport into a global Computable General Equilibrium (CGE) model

The Covid-19 pandemic has had opposite effects on demand for air passenger and air cargo transport and on the way these two sectors interact with other sectors of the economy. However, macroeconomic models generally represent aviation as a single sector, limiting the ability to assess those interactions. In this study, we split the air transport sector into two sectors (passenger and freight) in GTAP’s Multiregional Input–Output table. We assess the sectors’ response to a carbon tax by performing a sensitivity analysis. Our results highlight the environmental benefits from the Covid-19 pandemic will only be transitory unless policies and consumer demand rein in traffic growth in the aviation industry. Particular attention should be paid on leisure travel, due to its large share in the aviation industry and the potential steep rise in demand (87%) in the EU27 projected between 2015 and 2030.

Subsidizing extensive cattle production in the European Union has major implications for global agricultural trade and climate change

Pastureland maintenance is seen as a land-based measure to reduce dependency on feed concentrates and mitigate greenhouse gas (GHG) emissions from livestock production in the EU, while providing other ecosystems services. This paper assesses potential market-mediated impacts, including global Land Use Change (LUC) and GHG emissions, from increased subsidies to pasture-based livestock production in the EU. A tax recycling strategy (TRS) is simulated against a baseline up to 2030 under the shared socioeconomic pathway 2 (SSP2). This implies a budget-neutral increase in the level of pasture subsidies in individual Member States, as land subsidies for other cropping activities decrease. We employ the computable general equilibrium (CGE) model GTAP in its recursive-dynamic version, GTAP-RDEM, extended with the Multi-Regional Input-Output (MRIO) database FABIO to disaggregate agri-food sectors from 21 to 31. This approach allows considering price- and income-dependent feedbacks when assessing long-run changes in the global economy, improving the sectoral resolution relative to GTAP v10.The policy increases pastureland areas and cattle production in almost all EU Member States, whereas cropland and crop production decrease, causing significant changes across EU agri-food markets. Crop prices increase, leading to the reduced output of intensive animal production sectors, mainly pig and poultry. Cropland areas decrease and most EU countries increase imports of grain, oilseeds, and cakes, essentially soybean cake from Brazil and North America. While GHG emissions decrease in those EU countries where pasturelands expand mainly at the cost of croplands, GHG emissions increase in those countries where pastureland expansion comes with forest loss. As a result, net GHG emissions increase in the EU-27 in 2030 (+2.49 Mt CO2-eq). Emissions from LUC in major non-EU grain- and oilseed-exporting countries increase, e.g., by 102.52 Mt CO2-eq in Brazil and by 129.17 Mt CO2-eq in North America. The simulated policy shows that promoting extensive livestock per se does not meet the objectives of the Common Agricultural Policy and the EU Green Deal. The TRS should be complemented with policies to foster crop diversification and promote the use of domestic feed sources (e.g., legumes) to effectively ensure feed self-sufficiency and that extensive cattle production in the EU does not lead to deforestation in carbon-rich countries.

The Biodiversity Impact of Health Care: Quantifying the Extinction-Risk Footprint of Health Care in The Netherlands and Other European Countries

The health care sector exists to support and promote human wellbeing; however, its operations contribute to environmental degradation undermining nature’s capacity to support the same wellbeing. Biodiversity loss, in particular, creates threats to wellbeing through a reduction in ecosystem service provisioning and increases in disease. This study aims to estimate the extinction-risk footprint associated with the health care sector, focusing on Europe. We created an environmentally-extended multi-region input–output model using data on the extinction risk of species available from the International Union for Conservation of Nature’s (IUCN) Red List of Threatened Species. Using input–output analysis, we then quantified the extinction-risk footprint of the Dutch health care sector and, for comparison, that of the 30 European nations which use similar sector classifications in their National Accounts reporting. We found that the Netherlands has the highest health care extinction-risk footprint on a per-capita basis and that health care contributes 4.4% of the Dutch consumption extinction-risk footprint compared with an average of 2.6% across the comparator set. Food and beverage supply chains make a disproportionate contribution to health care’s extinction-risk footprint, while supply chains implicated in the sector’s carbon footprint make a limited contribution. These results suggest that reducing the environmental impact of the health care sector may require a differentiated approach when multiple environmental indicators are considered.

China’s cross-regional carbon emission spillover effects of urbanization and industrial shifting

With rapid urbanization and industrial shifting in China, demographic and industrial relocation leads to cross-regional carbon emission spillovers, which are playing an increasingly important role in regional carbon transfer and growth. However, how urbanization and industrial shifting influence carbon spillover still needs to be clarified. In this study, we use multi-regional input-output (MRIO) and scenario analyses to investigate the carbon spillover effects of urbanization, industrial shifting, and their synergy effect on provincial and sectoral carbon emissions in China during 2012–2017. The results showed that urbanization in China further increased carbon spillover in the provinces that already have a high spillover. Industrial shifting, as represented by cross-regional trade between sectors, drove changes in cross-regional carbon spillovers and significantly increased the spillover from Henan, Guangdong, and Hebei by 57.7, 29.9, and 23.6 Mt, respectively. By contrast, the synergy effect of urbanization and industrial shifting on carbon spillover was smaller than their separate effects, with Shandong having the highest increase about 0.61 Mt. Furthermore, at the sectoral level, the production and distribution of electricity and heat-power (PEH), smelting and processing of metals (SPM), and mining and washing of coal (MWC) sectors transmitted the largest carbon emission spillover effects among regions. Based on these findings, more fine-grained policy suggestions for assigning responsibility for carbon reductions and mitigation measures at the regional and sectoral levels in the context of urbanization and industrial shifting.

Physical and virtual water transfers in China and their implication for water planetary boundary.

China is an extremely water-scarce country with an uneven distribution of regional water resources. We define two absolute sustainability indicators, using the multi-regional input‒output (MRIO) model to outline the contribution of China's physical and virtual water transfers in mitigating the problem of regional water boundary-exceeding. Although the overall use of freshwater resources is within the safe operation space, 55% of province's water resource development transgresses the local water planetary boundary. Physical and virtual water transfers effectively mitigate the stress of water supply to the water planetary boundary in China's water-scarce regions. Among them, the role of virtual water transfers occupies the main part. The cost of using physical water in water-receiving regions and the situation of virtual water flowing from water-scarce regions to developed water-rich regions cannot be ignored, and a small number of provinces are responsible for most of the virtual water net imports and exports. The obtained results are helpful for the redistribution of water planetary boundary transgressing responsibilities among provinces and the formulation of absolute sustainable water resources management policies.

Has GVC participation exacerbated inequality of the embodied carbon in fossil energy industry export trade?

Introduction: The fossil energy sector is an important part of international trade, and the flow of products between sectors will bring about the flow of embodied carbon. There are relatively few studies on embodied carbon in the fossil energy sector, which are mostly concentrated in other sectors and are not well integrated with GVC. Combining embodied carbon with GVC provides a better view of the allocation of environmental responsibility in trade. At the same time, it can also help different countries to improve the environment with the help of GVC.Methods: This research is based on the World Input–Output Database. First, by using multi-regional input–output, this paper measures fossil energy trade embodied carbon (FEE) data of 39 countries from 2000 to 2014; second, using structural decomposition analysis, we find what factors affect FEE. Finally, we analyze theimpact of global value chain (GVC) on the FEE.Results: This study obtained the following conclusions: 1) different GVCs have different effects on the embodied carbon in trade. Simple forward, complex forward, and simple backward to embedded play a positive role. The complex backward GVC has a negative impact; 2) high-income countries can get greater positive environmental effects through GVC, and middle-income countries cannot obtain or obtain less environmental effects; and 3) the backward GVC affects the FEE by affecting the proportion of fossil energy consumption.Discussion: The results show that the FEE shall be jointly responsible for the world’s countries, and different countries should make different contributions to the world’s environmental protection comprehensively considering factors such as the economic development level of various countries. This proposes relevant policy suggestions in China.

Preenchendo a lacuna entre produção e ecologia: uma análise multirregional de insumo-produto das atuais relações produtivas e ecológicas brasileiras e chinesas

ABSTRACT The arising literature on Ecological Unequal Exchange (EUE) incorporates multiple elements of post-Keynesian strands, in particular the structuralist analysis of global economic relations and the center-periphery divide. Nevertheless, there is still little discussion in the literature on the synergies and interconnections of the productive and ecological aspects of the peripheral condition. This work intends to enter this debate by proposing a multi-regional input-output (MRIO) analysis of the recent pattern of economic relations between Brazil and China, focusing on the evolution and linkages between the productive and the ecological aspects. The results show a rising unequal exchange of biophysical resources that flows from Brazil to China which is tied to key sectors of the recent Chinese catching-up process. In conclusion, it is argued that productive and ecological hierarchies entail two sides of the same coin of the peripheral condition.

Can factor substitution reduce the shadow price of air pollution embodied in international trade? A worldwide perspective.

The calculation of trade-embodied air pollution (TEAP) and its economic losses can be reasonably used to assess the impact of transboundary air pollution. However, these air pollutants, which are associated with international trade, can be easily ignored due to their concealment. Based on this, the global multiregional input‒output model (MRIO) is used to quantify the volume of five air pollutants that are embodied in the trade of 20 countries from 2000 to 2016. Then, the shadow price of trade-embodied air pollution (SPTEAP) and the elasticity of factor substitution (EFS) are both calculated by applying the translog production function. Finally, impulse response analysis is used to study the dynamic impact of EFS on the SPTEAP. The main conclusions are as follows: (1) All countries experienced a mass transfer of TEAP, among which China and the USA are the developing and developed countries with the largest amount of TEAP transfers, respectively. (2) The SPTEAP and EFS vary greatly among countries, and these values are generally higher in developed countries than in developing countries. The relationship between the three EFSs can be expressed as [Formula: see text] in all countries, thus indicating that improving the technological level of a country is the best solution for reducing the TEAP in that country while incurring the lowest cost and the least difficulty. (3) Over the long run, the increase in [Formula: see text] and [Formula: see text] reduces the SPTEAP. Conversely, an increase in [Formula: see text] increases the SPTEAP. Therefore, policymakers should weigh these three factors according to the fluctuation of the SPTEAP and constantly adjust the allocation structure and ratio of these factors to maximize the benefits of transboundary air pollution governance.

Impacts of water constraints on economic outputs and trade: A multi-regional input-output analysis in China

Water resource constraints pose significant challenges to sustainable development of economy, environment, and human society. This study addresses the existing gap in understanding the impacts of water resource constraints on economic outputs and inter-provincial trade in China. A water-use constrained multi-regional input-output (MRIO) model is developed to analyze the impacts on economic outputs resulting from different water constraints imposed on economic sectors. A series of scenarios are designed to represent different levels of sectoral water use restrictions based on short-term water policy and water stress alleviation targets. Results reveal that regions experience different levels of water stress displaying diverse economic impacts due to future water restrictions. Overall, national economic outputs will experience a 0.76–1.14% decrease compared to the baseline scenario, that is, the “business-as-usual” scenario. Provinces with lower levels of economic development tend to be less resilient to the economic losses arising from water constraints. As such, Ningxia and Shanxi show with the greatest relative economic impact, accounting for 7.09% and 4.21% of their respective provinces’ economic outputs under the baseline scenario. Furthermore, the direction of net bilateral trade, such as net trade between Henan and Shaanxi or between Henan and Hunan, would reverse under water constraint scenarios from the baseline scenario. This underscores the importance of considering the cascading effects of local water constraints on inter-provincial trade. Our study highlights the trade-offs between water conservation and economic development, emphasizing the need for region-specific water-saving measures.

Modifying national industrial structure for reducing heavy metals in China: A nexus-based multi-objective optimization approach

Heavy metals (HMs) exhibit significant toxicity and can lead to a range of health issues. Certain HMs share common emission sources, necessitating an exploration of the nexus among various HMs for achieving collaborative reductions. Considering the efficacy and feasibility of industrial modification to environmental pressures, this paper proposes a novel nexus-based optimization approach based on nexus analysis, multi-region input-output (MRIO) table, and multi-objective optimization to mitigate atmospheric HMs. The atmospheric HM emission inventory in 2017 is first compiled. Subsequently, the Integrated Nexus Strength of HMs Risk (HMR-INS) is proposed and employed to determine the range of sectoral output variations. Finally, a multi-objective optimization approach is employed based on the MRIO table in 2017. Compared with the traditional optimization method, the proposed approach performs better regarding HM-related risks and total output, leading to a 1.9 million tons increase in reduction on HM-related risks and a 1.37 trillion yuan increment in total output. Some further analyses are also given to provide feasible solutions for industrial modification, which considers both the economic efficiency and the stability of the industrial structure.

The fairness of shared responsibility for embodied carbon emission: a case study of the Yellow River Basin, China.

Under the dual constraints of China's carbon peaking and carbon neutrality goals, as well as ecological protection and high-quality development of the Yellow River Basin, clarifying the embodied carbon emissions and responsibility sharing of inter-provincial trade is crucial to the carbon reduction strategy of the Yellow River Basin. This paper uses the MRIO (multi-regional input-output) model to measure the production-side and consumption-side responsibility sharing of nine provinces in the Yellow River Basin in 2012 and 2017, revealing the amount and direction of the embodied carbon transfer between provinces, and finally introduces the share of provincial value added as the responsibility sharing factor to compare and analyze the differences between the three responsibility sharing methods. The results show the following: (1) The embodied carbon emissions on the production side in most provinces of the Yellow River Basin were larger than that on the consumption side, with the most significant differences in Shanxi, Inner Mongolia, and Shandong, among which local demand carbon emissions and intermediate product transfer out of carbon emissions were the main causes of production-side carbon emissions. (2) In general, all provinces except Shaanxi were net carbon transfer-in regions, and the embodied carbon was mainly transferred to Beijing, Jiangsu, Guangdong, Zhejiang, and Hebei. (3) Shared responsibility for carbon emissions was jointly determined by the volume of embodied carbon trade and the ability to obtain value added, which lay between production and consumption side responsibility shares. (4) The Yellow River Basin had a large responsibility-sharing factor and embodied carbon trade, and thus needs to take more responsibility for emission reduction. This study is expected to provide scientific support for the strategy of differentiated emission reduction in the Yellow River Basin and enrich the regional carbon accounting methods.

The role of intermediate factors in China's energy consumption from the perspective of global production chain

With the fragmentation of global production, the share of intermediate trade in international trade has increased significantly. Nevertheless, more research must be done on how intermediate trade factors influence energy consumption. This paper utilized the multi-regional input-output (MRIO) model to categorize China's energy utilization into six parts based on its position within the global production chain. Additionally, it examined the impact of intermediate factors on China's energy consumption through index decomposition analysis (IDA). The results revealed that: (1) from 2000 to 2014, intermediate factors led to an increase of 1380.96Mtces in China's energy consumption, accounting for around 37% of the national total; (2) the reduction in efficiency is the primary cause of the surge in domestic intermediate energy consumption, while the increase in market proportion is the dominant driver promoting international intermediate energy consumption growth; (3) the international intermediate proportion contributed the most among all intermediate factors. Drawing upon the findings above, this paper proposed policy recommendations to regulate China's rising energy consumption, precisely the escalation of intermediate process energy usage, focusing on the global production chain.

Energy efficiency assessment of wastewater treatment plants in China based on multiregional input–output analysis and data envelopment analysis

Wastewater treatment plants (WWTPs) play a pivotal role in natural water recycling and safeguarding the water security of approximately 42% of the world's population, yet they confront challenges posed by escalating energy consumption and regional energy constraints. In this study, we developed an evaluation framework that integrated regional energy scarcity with the operation conditions of WWTPs to quantify their energy efficiencies by applying multiregional input–output (MRIO) analysis and data envelopment analysis (DEA). A case study using this framework was conducted on 3776 WWTPs in 30 provinces in China. The results showed that the average scarcity-based energy efficiency level of WWTPs in China was low, of which those in northern provinces were higher compared to southeastern provinces. Furthermore, only 24 WWTPs in China attained the highest efficiency levels, while the rest had different degrees of input redundancy, indicating an energy-saving potential of 9.05 × 109 kWh. This paper enables the development of optimal efficiency strategies for WWTPs in different provinces considering the potential energy scarcity risks caused by trading activities.

Estimating the global production and consumption-based water footprint of a regional economy

The current scenario of increasing use and pollution of water resources and the effects of climate change on natural supply coexist with a high trade interconnection, where impacts are transmitted from local to global scales. Identifying and quantifying these impacts is essential to focus and coordinate policies for sustainability. In this context, this study develops a methodology to estimate the pressures of a regional economy on global water resources. Unlike previous studies, which have focused mainly on the regional and national blue water footprint (WF) of consumption, the proposed framework integrates in an innovative way: i) an estimation of the global green, blue and grey WF, ii) a comparison between production and consumption-based approaches, iii) a spatial disaggregation, and iv) a scarcity-based assessment. Specifically, a regional input-output (IO) model and a global multiregional IO model are used, which allows identifying the origin and quantifying the water incorporated in imports. The Tuscany region in Italy is considered as a case study, where the domestic WF has been studied, but global impacts on water resources are unknown. The results show that, although 42.7 % of Tuscany's imports come from outside Italy, the pressures on water resources exerted abroad represent 81.2 % (production) and 73.4 % (consumption) of total. This result is amplified when only water incorporated under scarcity conditions is considered, reaching 96.3 % (production) and 94.6 % (consumption). The proposed approach allows characterizing the most significant impacts, which could guide policies to promote the consumption and import of products with low water incorporated under stress conditions.

Tracking household carbon inequality in China: Composition effect or coefficient effect?

Reasonable allocation of carbon emission reduction tasks requires addressing household carbon inequality. This study aims to track characteristics of household carbon inequality in China using the recentered influence function (RIF) based on the Household Tracking Survey data in 2018 and the multi-regional input–output table. The Oaxaca–Binder decomposition based on RIF further decomposes household carbon inequality based on spatial heterogeneity into composition and coefficient effects. The results indicate that (1) household carbon inequality is widespread in China, generally close to the 60/30 distribution, favouring high-income families. Furthermore, (2) increases in income, wealth and economic burden and declining marriage rate promote household carbon inequality, which is suppressed by the development of education and the Internet and the increase in car ownership. Additionally, (3) the carbon inequality of urban households is smaller than that of rural households, which is contributed by the composition effects of family size, education, car ownership, Internet development and the coefficient effect of income and housing. Finally, (4) under the composition effect of family size and the coefficient effect of income, the household carbon inequality in the eastern region is smaller than in the central and western regions.

Unequal prefecture-level water footprints in China: The urban-rural divide

Water is vital for inclusive human well-being and economic growth, but water and its benefits are not equally distributed to all. The water gap between city dwellers and rural folks was not well understood. In this paper we assessed prefecture-level urban and rural water footprints (WFs) in China, using an improved multi-region input-output (MRIO) table with resolved urban and rural final consumption data. The assessment provided a quantitative foundation for evaluating and explaining urban and rural water use inequality from the consumption perspective. The results showed that per capita urban WF was on average 2.1 times per capita rural WF. The urban-rural WF divide constituted an important contribution to spatial WF inequality, in addition to provincial-level and prefecture-level differences. Compared to previous provincial-level WF analyses, this high-resolution prefecture-level urban and rural analysis showed clear evidence of economically developed urban areas as hotspots of large WFs. Specifically, our results provided a quantitative assessment revealing that 10 % China's population (urban residents in 51 prefectures) appropriated 25.8 % of the national WF. The dominant driving factor for urban-rural per capita WF disparity in all the prefectures was the consumption level, accounting for on average about 84 % of the disparity. There is an urgent need to leverage socio-economic development and urbanization against equitable and sustainable water use. The results have implications to equitable and sustainable water management from a broader macro-economic view.

Inversed virtual water flow pattern and its influencing factors in Northwest China

Northwest China faces an imbalance between scarce water resources and increasing water use demands for agricultural production and economic growth. However, the shifts in virtual water flow (VWF) patterns in Northwest China and its the driving factors are still unclear. In this study, we employed the Multiregional Input–Output (MRIO) method to investigate the evolution of VWF patterns among Northwest China’s primary, secondary, and tertiary industries and analyze their driving factors through Stochastic Impacts by Regression on Population, Affluence, and Technology (STIRPAT) model. The results show that (1) Northwest China changed from 7.24 × 108 m3 net inflow to 175.70 × 108 m3 net outflow from 2002 to 2007. (2) More than 90 % of virtual water of the primary industry was used locally, but both secondary and tertiary industries depended more on virtual water inflow in Northwest China. (3) The virtual water outflow from Northwest China is mostly to the Jing-Jin Region, followed by the Northern Coast, and the main inflow is from the Central Region. (4) Population, economy, and technology affect virtual water from inflow to outflow, and technological development helps to decrease virtual water flow volumes. In conclusion, dramatic decrease of second and third industries inflow is the main reason for the changes from net inflow to net outflow of Northwest China. Meanwhile, it is feasible to increase technological support to further reducing virtual water consumption in primary industry, and strengthen virtual water trades of secondary and tertiary industrial virtual water inflows by promoting population and economic conditions.

Optimal governance strategies for air pollution embodied in Sino-US trade: Evidence from a differential game model

The discussions between countries on trade inequality and ecological inequality have become increasingly heated, making cooperation on air pollution governance a priority. Based on the global multiregional input‒output (MRIO) model for calculating Sino-US trade-embodied air pollution (TEAP), an economic compensation mechanism is introduced into a differential game model. The main conclusions are as follows: (1) In bilateral Sino-US trade, the TEAP transferred from the United States to China is 6.85 times that transferred from China to the United States, showing serious ecological inequality. (2) The optimal TEAP emissions are influenced only by domestic factors in the noncooperative game, while they are jointly controlled by factors from both countries in the cooperative game. The optimal compensation coefficient is also influenced by factors from the two countries in the noncooperative game. In addition, the optimal TEAP stock and optimal investment stock are positively correlated with the initial stock under the two game scenarios. (3) Through numerical simulation, compared with the noncooperative game with economic compensation, the cooperative game without economic compensation can significantly reduce the optimal TEAP emissions and optimal TEAP stock; however, this reduction requires more governance investment. Consequently, China and the United States should comprehensively consider the advantages and disadvantages of the two governance strategies to maximize their overall economic benefits on the basis of basic fairness.

Dynamic simulation of the water-land-food nexus for the sustainable agricultural development in the North China Plain

Inter-regional trade of agricultural products based on the flow of agricultural virtual resources is of great importance for sustainable agricultural development. We focused on grain crops (rice, wheat and maize) in the North China Plain (NCP), and used the Penman–Monteith equation to simulate crop water requirements. We further analyzed the flow of virtual land and virtual water associated with the grain trade using an environmentally expanded multi-regional input–output model. The coupling coordination of land, water, and food was evaluated to assess the rationality of regional agricultural production resource allocation. Between 2007 and 2017, agricultural virtual land and virtual water embodied in the grain trade between the NCP and other areas increased by 48.10 % and 34.41 %, respectively, indicating that the NCP is gradually consolidating its position as the main production area and distribution center of crops in China. Agricultural virtual resources in the NCP were mainly transported to the southeast coastal region, with an overall trend of resource movement from north to south. The total supply of agricultural land and water resources markedly increased in the NCP, whereas the transfer of virtual resources across regions showed a decreasing trend. Because of the irrational structure of crop cultivation and unevenness of regional resource allocation, the coupling coordination of the water–land–food nexus in the NCP is much lower than the national average. This study provides important information on the trade flows and coupling relationships of virtual water and land resources of three major food crops, which will help to alleviate resource pressure in agricultural production and promote sustainable agricultural development in the NCP.

From mines to consumption via global supply chains: A viewpoint on assessing modern slavery and disease interactions

Globalisation has narrowed the gap between producers and consumers, with complex global supply chain networks forming the basis of many of the products we consume today. Modern slavery risk is known to be an ‘invisible’ problem, as modern slavery impacts are embodied in products consumed in geographically distant regions. In this viewpoint, we highlight that modern slavery and disease risk interactions have not been explored in global supply chains. We explore the value of multi-region input-output (MRIO) analysis in exploring the effects of consumption activities on modern slavery and disease risk. Using the Democratic Republic of Congo (DRC), a region where modern slavery and disease risks are known, as a case study, we explore the potential for an integrated framework based on MRIO analysis to identify modern slavery-disease risk hotspots in supply chains. We discuss the significance of this framework in global policy setting and explore avenues for future research.