Multi-regional Input Output Research Articles

How nearshoring reshapes global deindustrialization

Although recent decades were marked by within-country deindustrialization, this was not observed on the global level, as jobs moved from smaller, highly productive countries to large, less productive ones. We provide new empirical evidence that this trend reversed in the mid-2010s. We compiled annual employment data for 64 industries in 45 economies for 2010–2020 that are compatible with the multi-regional input–output tables provided by Eurostat in the FIGARO 2022 database. The data show that global employment generated by vertically integrated manufacturing activities has started to decline. The regionalization of global value chains was identified as the main driver that has reversed this trend, as the level of offshoring from most regions has declined.

A Study on Water Rights Allocation in Transboundary Rivers Based on the Transfer and Inequality Index of Virtual Water

Virtual water exerts an essential effect on water resources, yet such effect is rarely considered in current studies on water rights allocation in transboundary rivers. Hence, this paper ran a case study on Taihu Lake Basin, collecting data from 2017 to make clear the physical water rights of four regions—Jiangsu Province, Zhejiang Province, Anhui Province, and Shanghai City—in the Basin. After that, the multiregional input–output (MRIO) approach was utilized to measure the trade in value-added (TiVA) transfer and virtual water transfer (VWT) and construct an inequality index of VWT (VWI). Next, water efficiency coefficient was employed to convert the VWT into riparian level. Finally, VWT and VWI were incorporated into the water rights allocation model to form up a water rights allocation scheme for Taihu Lake Basin. Results showed: (1) Jiangsu enjoys the most allocated physical water rights, followed by Zhejiang, and Anhui ranks the lowest; (2) Anhui and Jiangsu are net virtual water exporters (2.259 billion m3 and 1.78 billion m3, respectively), while Zhejiang and Shanghai are net importers (2.344 billion m3 and 1.695 billion m3, respectively); (3) Anhui suffers the most inequality—0.4401—followed by 0.5076 of Jiangsu, while Zhejiang has the most equal environment—0.7012; (4) after the inclusion of virtual water, the quantity of water rights allocation changes, whereas Anhui experiences the largest growth—144 million m3—due to the dual effects from the highest VWT and inequality. In conclusion, the effect of virtual water is indispensable, so VWT and VWI should both be considered in the physical water rights allocation of transboundary rivers.

Analysis of embodied carbon emissions and carbon sequestration in Tibetan Plateau-Case study of Tibet and Qinghai

The Tibetan Plateau is one of the most important carbon sinks, while it is facing with huge pressure of carbon emission in the process of urbanization, and the inter-regional trade activities lead to the carbon emission structure to be more complex. To facilitate the realization of carbon neutrality, it is required to figure out the carbon sequestration capacity and the carbon emissions caused by socio-economic activities of the Tibetan Plateau. This study adopted the net primary productivity (NPP) remote estimation model to evaluate carbon sequestration capacity and utilized a multi-regional input–output analysis framework combined with a structural decomposition analysis model for embodied carbon emission evaluation of Tibet and Qinghai to identify the carbon emission characteristics in 2012 and 2017. The results reflect that Tibet had great potential for carbon neutrality, but Qinghai had a slight carbon deficit from both the production and consumption perspectives. The carbon emission flow patterns shown that Tibet was basically a net emission importer, and Qinghai mainly imported net emissions from northern China like Inner Mongolia, Henan, and Hebei, and exported emissions to southern China like Shanghai, Zhejiang, and Guangdong. The energy production and supply industries were the largest carbon emission sources and the major contributors of emission growth for Tibet and Qinghai. The gross capital formation have induced about 75% of the consumption-based emissions in plateau in both 2012 and 2017. The increased emissions were mainly driven by changes in average consumption structure, which promoted the emissions increased by 34.70% and 23.21% for Tibet and Qinghai, respectively. It can be concluded that the main task to achieve the target of carbon reduction is to change the energy structure of the Tibetan Plateau into a cleaner structure to reduce dependence on high-carbon products from other provinces and promote green development all over the country.

Will Trade Protection Trigger a Surge in Investment-Related CO2 Emissions? Evidence from Multi-Regional Input–Output Model

Current research has revealed that global trade promotes transnational investment and contributes to large amounts of CO2 emissions. Recently, trade protectionism has gradually emerged. This study aims to explore the effect of global trade protection on investment-related CO2 emissions. We construct an accounting framework for investment-related CO2 emissions under trade freedom and trade restriction based on the MRIO model for the first time, and investment-related CO2 emissions in 16 economies are determined in both trade freedom and trade restriction scenarios. The study uses normal trade and no-trade scenarios instead of free trade and restricted trade scenarios. Then, based on the comparison of the two scenarios, the effect of global trade protection on investment-related CO2 emissions is revealed from the three levels of country, section, and trade links. It is found that global trade protection would lead to an increase of up to 546.17 million tons in investment-related CO2 emissions under current trade structures. Transnational investment in the trade of end-stage intermediary goods contributed 81.6% of the total effect. In terms of countries, trade protection is quite disadvantageous to CO2 emission reduction in China and India, and their CO2 emissions would respectively increase by 105 million tons and 141.5 million tons compared to normal trade. The electricity, gas, and water supply sectors and the manufacturing sector are the main sectors for investment-related CO2 emissions. This study reveals the effect of trade freedom and trade protection on the environment of various countries from the viewpoint of investment-related CO2 emissions, which has important reference value for global CO2 emission reduction in the context of the evolving trade situation.

Multi-state economic contribution and multi-congressional district impact analysis of an inland waterway disruption

In spring 2019, the Oklahoma segment of the McClellan-Kerr Arkansas River Navigation System (OK-MKARNS), a significant in-land water transportation segment in the Central Great Plains region of the United States, was forced to close for months due to an extreme flooding event. The OK-MKARNS supports the economy of multiple states and their connection to domestic and international markets through the Mississippi River. However, the flood’s direct, indirect, and induced impacts on Oklahoma’s economy and the economies of the surrounding states of Arkansas, Colorado, and Kansas are unknown. The disruption’s impacts on the region’s economies are evaluated at the congressional district levels of these states using a multi-regional input–output model. Disruption of the waterway transportation resulted in a total loss ranging between 66 and 791 jobs, $15.36 to $175.04 million in output, and $6.08 to $72.98 million in value-added, depending on the duration of the delay experienced by industries. The magnitude of economic loss varied for each congressional district, depending on its economic base’s composition and proximity to the OK-MKARNS navigational system. These findings could be helpful to legislators and other decision-makers in allocating scarce resources toward the maintenance of navigable waterway infrastructure. The multi-regional focus of the analysis also suggests a potential role concerning collaborative efforts between legislators across state borders to garner federal spending to support navigable waterway services.

Assessing Transboundary Impacts of Energy-Driven Water Footprint on Scarce Water Resources in China: Catchments under Stress and Mitigation Options.

The energy supply chains operating beyond a region's jurisdiction can exert pressure on the availability of water resources in the local area. In China, however, there is a lack of transboundary assessments that investigate the effects of energy consumption on water stress within and across river basins. In this study, we therefore investigate transboundary impacts on scarce water resources that are induced by energy demands (i.e., electricity, petroleum, coal mining, oil and gas extraction, and gas production). We develop a bottom-up high spatial resolution water inventory and link it to a 2017 multiregional input-output (MRIO) table of China to analyze supply chain scarce water use at provincial and river basin levels. We find that the energy-driven water footprint accounts for 21.6% of national water usage, of which 35.7% is scarce water. Nonelectric power energy sectors contribute to around half of the nation's scarce water transfer. We identify three sets of catchments whose water resources are stressed by energy demand, i.e., (a) from the northern Hai River Basin to the eastern part of the Yellow River Basin and the Huai River Basin, (b) the northern area of the Northwest Rivers, and (c) the developed coastal city clusters in the Yangtze River Basin and the Pearl River Basin. We then evaluate the impacts of eight mitigation options, which may potentially shift around half of the moderate- or high-stress areas in the Hai River Basin and the Northwest Rivers to low to moderate (or even low) stress. We highlight the need for transboundary collaboration to sustain water-constrained energy demand and to develop targeted measures to mitigate stress on water resources within a river basin.

Multi-region Input-Output-based Carbon and Energy Footprint Analysis of U.S. Manufacturing

In this research, U.S. manufacturing activities' life cycle-based carbon and energy footprint impacts have been quantified, taking international trade linkages with the rest of the world into account. The U.S economy has been integrated into a multi-region input-output (MRIO) life cycle assessment framework where total of 40 major economies, including the USA, China, Russia, and others, plus the rest of the world (ROW) were modelled to assess global energy and carbon footprint impacts. Each country's economy is assumed to compromise 35 major industries based on the WIOD database classification. A total of 1435 (41 × 35 = 1435) industries has therefore been taken to represent the global structure of the world economy. The novelty of the approach is that the MRIO model has been developed in a stochastic fashion, plus global trade-linked uncertainties have also been taken into consideration. Top carbon emitting and energy consumer industries and countries have been analysed using data analytics and statistical modelling methods. The results show that the USA is the largest contributor to the total carbon footprint (CFP) and the total energy footprint (EFP) with 81.73% and 84%, respectively. Moreover, the agriculture/hunting forestry/fishing sector and the electricity/gas/water supply sectors dominate the overall U.S. carbon footprint, contributing 22% and 21.28%, respectively. The coke/refined petroleum/nuclear fuel sector has the largest share of the total energy footprint, with 47.9% of the total impacts.

Determinants and spatial spillover of inter-provincial carbon leakage in China: The perspective of economic cycles

Measuring and analysing carbon leakage are the foundation for improving environmental responsibility. Based on the origin–destination approach and spatial spillover analysis, this study explores factors of China's inter-provincial carbon leakage. A multiregional input–output model was used to obtain the carbon footprint of consumption, and the factors of carbon leakage were assessed. The results revealed that the economic development and environmental regulations of the origin and destination have opposite effects on carbon leakage. Accordingly, provinces with high-energy intensity and abundant energy resources are mainly net-exported carbon, whereas provinces with underdeveloped secondary industries are mainly net-imported carbon. Notably, a positive spillover effect of energy intensity exists at the origin, and a negative one occurs at the destination. Moreover, a positive spillover affects the origin's energy output, and the surrounding areas' energy endowment can create favourable conditions for carbon leakage at the origin. Finally, corresponding policy suggestions are presented based on the above analysis.

Analysis of Carbon Emissions Embodied in the Provincial Trade of China Based on an Input–Output Model and k-Means Algorithm

National or regional carbon emissions are generally accounted for by the principle of “producer responsibility”, which ignores the embodied carbon emissions implied in product consumption via inter-regional trade. Therefore, it is necessary to include the embodied carbon emissions into the product consumption regions for overall calculation. As an example, this paper analyzes the characteristics of China’s domestic regional carbon flow network based on a multiregional input–output table and carbon emission data, identifying three clusters of carbon emission characteristic regions by k-means—the clustering algorithm of machine learning. The research results show that some provinces—such as Beijing, Zhejiang, and Guangdong—are the net input areas of embodied carbon emissions (“consumers”), consuming products and services produced by “producers” such as Hebei, Shanxi, and Inner Mongolia through trade, implicitly transferring the responsibility for carbon emissions. Accounting for carbon emissions worldwide/countrywide should consider both production responsibility and trade income. Our findings provide a novel national or regional classification approach based on embodied carbon emissions, which calls for an equitable regional distribution system of carbon emission rights. Meantime, inter-regional cooperation is of great significance in achieving carbon neutrality. In particular, the economically developed regions need to offer assistance to improve the energy efficiency or optimize the energy structure in less developed regions, by means of capital investment and technology transformation.

The expansion of the middle and rich classes heterogeneously intensifies regional water withdrawal in China

China’s population–income structure has undergone significant changes. However, the impact of population expansion and changes in consumption patterns of specific income groups on regional water withdrawal has not been quantitatively assessed. Here we incorporate multiregional input–output (MRIO) tables with national survey data to capture the water footprint (WF) in the consumption of each income group in China by considering each group’s consumption patterns and population changes. The results show that the middle and rich classes contributed 83% (2012) and 89% (2015) of embodied water withdrawal, respectively. Among the driving factors leading to changes in water withdrawal, changes in consumption patterns and the population–income structure led to increases of approximately 15.4 billion m3 and 12.4 billion m3 , respectively. Households on the East Coast (EC), and South Coast (SC), as well as in Central China (CC), and Southwest (SW) were the key contributors to the increase. Our findings highlight essential water conservation policies to consider to meet the needs of transforming society.

Collaborative energy–water–carbon management based on energy substitution and multiple compound responses

Symbiotic consistency among several limited resources has become increasingly prominent. Dependence on fossil fuels, combined with energy consumption–induced water scarcity and excess carbon emissions, jeopardizes sustainable development. This study developed a provincial-scale energy substitution and response (ESR) model to (a) aggregate homogeneous regions and emphasize consistency of results; (b) formulate energy-substitution strategies based on ecological utility maximization; (c) explore responses from the threefold perspective of environmental improvement, economic utility, and system robustness; and (d) reveal the effects of the main factors and their interactions to support policymaking. An approach that combines the k-means algorithm, multiregional input–output analysis, ecological network analysis, and factorial analysis was applied to China to verify the models. It was found that the uneven transfer of interregional ecological flows across regions is not conducive to the health of metabolic mechanisms. Energy substitution can bring the multiple benefits of resource conservation, environmental improvement, profit growth, and sustainability enhancement. Regions I, IV, and V can take the lead in implementing substitutions while Regions II and III can adopt a joint substitution strategy to obtain compound effects. Natural gas and liquefied petroleum gas facilities should be built in more developed regions while clean energy subsidies should be supplemented in underdeveloped areas. This study's findings offer a new perspective for coordinating environmental, economic, and social development while avoiding high unemployment and regional population loss caused by energy system restructuring.

The effect of multiple shocks on domestic production network: evidence from China’s manufacturing industries

ABSTRACT The domestic production network in China has been affected by multiple shocks in recent years, and this study reveals the dynamic changes of the shocks’ effects. Based on a domestic trade model with industry-level unobserved factors, we examine the trends of multiple shocks to the domestic market of China’s manufacturing industries and find that the domestic market has been bolstered by upward shocks until 2010, while has been depressed by downward shocks thereafter. Furthermore, based on multi-regional input–output analysis, we evaluate the impacts of domestic market shocks on industries’ value-added in the domestic value chain (DVC). We find that from 2004 to 2012, the domestic market shocks significantly promoted industries to participate in DVC embodied in the global value chain (DVC1), while after 2012 the shocks began to promote industries to participate in DVC completely based on endogenous capabilities (DVC2). However, the DVC2 position has not been upgraded by domestic market shocks. From another perspective, we investigate the impacts of domestic market shocks on the industrial linkage structure and find that the impact on industries’ centrality turns from negative to positive after the 2008 global financial crisis.

Carbon Footprint Analysis of the Freight Transport Sector Using a Multi-Region Input–Output Model (MRIO) from 2000 to 2014: Evidence from Industrial Countries

Freight transportation performs a critical role in the supply networks of the global economy and is heavily influenced by the activities of the industrial and manufacturing sectors, contributing significantly to their global carbon footprint (CFP). This research evaluates the lifecycle-based CFP emissions of freight transport activities in seven selected countries (China, Japan, the United States, Canada, Brazil, Great Britain, and Germany) over fifteen years, considering international trade linkages with the rest of the world. In the literature, most researchers have investigated the CFP of the transportation sector in general or analyzed the CFP of two or three countries, such as the USA and China. However, this research is novel in that it examines the CFP of the freight transport sectors of the seven biggest industrial countries. In addition, a positive relationship was found between the CFP and the gross domestic product (GDP), population, level of urbanization, and area of these countries. Therefore, this study investigates the relationship between global CFP, GDP, population, level of urbanization, and country area. A total of 15 stochastic model-based multi-regional input–output lifecycle assessments were built for each country, comprising 35 key industries. Statistical modeling tools were used to assess carbon emissions. The results show that China is the largest contributor to the freight-related CFP, while the U.S. is the second largest. The manufacture of coke and refined petroleum products represents the dominant sector. In contrast, warehousing and support activities have the most significant contributions in Germany and Great Britain. Land transport and transport via pipelines contribute the most to Canada’s CFP. The results of the regression analysis show that there is a positive relationship between the investigated variables.

Temporal and Spatial Divergence of Embodied Carbon Emissions Transfer and the Drivers—Evidence from China’s Domestic Trade

To understand the embodied carbon transfer in China’s domestic trade from 2007 to 2017 and its driving forces, we quantitatively measured the embodied carbon transfer among 30 provinces by using the Multi-regional input-output (MRIO) model, explored the temporal and spatial evolutionary features of the interprovincial embodied carbon emission transfer by using spatial autocorrelation, and further revealed its drivers using the Geographical Detector Model for the first time. We find that: (1) Based on the producer and consumer accounting principles, the amount of embodied carbon emissions of each province has increased, and there are huge differences. (2) The number of provinces with net embodied carbon emissions transfer is increasing, to 18 in 2017 and the target provinces are mostly energy-rich regions, such as Shanxi, Xinjiang, and Inner Mongolia, which have a severe “carbon leakage” phenomenon with developed coastal provinces. (3) The scale and spatial distribution of net carbon transfer out shows a characteristic of “high in the north and low in the south”, and the tendency of net transfer from the less developed provinces to the developed regions is becoming more and more obvious. (4) The global differences in the promoting factors of the net embodied carbon transfer are not prominent, but the differences at the local scale are significant, with energy intensity and environmental regulation playing an increasingly significant role. Therefore, it is recommended to strengthen low-carbon technology innovation and environmental regulation, increase the percentage of renewable energy consumption, accelerate the mobility of various resource factors, and improve energy utilization efficiency.

Assessing the economic ripple effect of flood disasters in light of the recovery process: Insights from an agent-based model.

To assess the economic ripple effect, this study integrates agent-based modeling (ABM) with a multiregional input-output (MRIO) table to develop an assessment model that considers capacity recovery process. The intermediate and final demands in the MRIO table are used to describe the agents' interdependence. Survival analysis is used to construct capacity rate curves. By defining the first- and second-order ripple effects, ABM is used to capture the ripple process in days. To conduct a case study, the service and retail sectors in Enshi in Hubei, China, are selected as disaster-affected sectors (they were severely affected by the July 17, 2020 flood disaster). The main findings are as follows: (1) With the first-order ripple effect, the losses caused by service and retail are concentrated within Enshi. Enshi's final demand, construction, and raw materials manufacturing sectors as well as Wuhan's construction sector are seriously affected. (2) With the second-order ripple effect, the losses caused by the service and retail sectors expand, forming a prominent industrial ripple chain: "service (retail)-raw materials manufacturing-construction." (3) The direct and indirect losses caused by the service sector are more significant than those caused by the retail sector. However, the loss ratio of the service sector is smaller than that of the retail sector because of its sound industrial structure and strong resilience. Hence, the indirect losses caused by different sectors are not entirely determined by their direct losses; instead, they are also related to the degree of perfection of the structures of different sectors.

Social cost of household emissions: cross-country comparison across the economic development spectrum

Household consumption accounts for the largest share of the global anthropogenic greenhouse gases (GHG) emissions. The literature assessing the environmental impacts of household consumption is mostly focused on developed economies, thus, leaving a critical gap when it comes to assessing the impacts of household consumption and of related environmental policies in developing countries. Therefore, in order to fill this gap, this study analyzes household consumption-based emissions for high income, upper middle income, lower middle income, and low-income countries from six different geographical regions. It assesses the sector-wise CO2, CH4 and N2O-footprints and evaluates their social costs. The study methodology employs an environmentally extended multiregional input–output model from the EORA26 database which uses a common 26-sector classification for all countries. The findings show that household consumption accounts for 48–85% of the national CO2-footprints. (The values are similar for CH4 and N2O.) Developing economies have lower CO2-footprints of household final consumption than developed economies, but exert a higher pressure on the environment with respect to CH4- and N2O-footprints per capita. That highlights the necessity to focus environmental policies in developing countries on tackling CH4 and N2O on a first-priority basis. The study also identifies those sectors where the social costs of aggregated CO2, CH4 and N2O emissions make up a substantial share of the industries’ output, thus, indicating the level of technological efficiency of the respective economies and the industries where more stringent environmental regulation should be implemented.

So close, no matter how far: A spatial analysis of CO2 emissions considering geographic and economic distances

AbstractIn recent years, the effects of climate change have become a topic of growing interest in the literature. Many works claimed the importance of spillover effects while studying CO2 emissions. Most part of them considers these indirect effects from a geographical perspective. The reduction of transportation costs makes other factors more important. Thus, the main aim of this paper is to analyse the existence of spatial dependence, considering geographical and economic proximity and comparing both measures. Empirically, we make use of the World Input–Output database with a worldwide focus from 2000 to 2014. Based on an environmentally extended multiregional input–output model, we estimate the CO2 emissions embodied in the domestic production and international trade between countries. To analyse the dependence from both perspectives, we carry out a spatial econometric analysis and make use of two different spatial weight matrices. The results offer a new approach on this field, highlighting the importance of the spillover effects to explain the CO2 emissions of the local country, showing that economic proximity is even more important than geographical one.

European multi regional input output data for 2008–2018

Regioindustry trade flow data are useful inputs for economists and policy makers for a range of planning and disaster-response applications. Within the European Union (EU) whose members enjoy free trade, small variations in these granular trade flows can often propagate to other member-countries far beyond the original trade-shock. In spite of their importance, this information is either outdated or non-existent in the EU as the official databases only provide data at the national-sectoral or regional-only (non-industry specific) level. To fill this gap, we construct Multi-Regional Input-Output (MRIO) tables for 272 European NUTS-2 regions for the period 2008–2018, building on freight transport data as their main trade route across them. The database covers 10 sectors for industry, services and agriculture. We successfully validate our estimates through a direct comparison with a previous MRIO dataset for European regions (REGIO), a sub-sample of countries reporting regional trade flow data as the “ground truth” and a sensitivity analysis reporting relative standard errors well below the MRIO literature average.

Volatile organic compounds emissions embodied in fixed capital formation in China: Gravity movement and decoupling analysis

Volatile organic compounds (VOCs) emissions have increased rapidly in China, but little is known about the characteristics of VOCs emissions embodied in China's fixed capital formation (FCF). We investigate the VOCs emissions embodied in various FCF categories in the economic sectors of 30 Chinese provincial-level regions using the multi-regional input-output (MRIO) method. The gravity theory is combined with the Shapley decomposition method to uncover the gravity movement of embodied VOCs emissions in FCF and regional contributions behind. Besides, the Tapio decoupling index is combined with the logarithmic mean Divisia index (LMDI) method to identify the key drivers of decoupling between embodied VOCs emissions and embodied added value driven by FCF. The results indicate that China's embodied VOCs emissions in FCF increased by 10.9% during 2012–2015 and decreased by 4.2% during 2015–2017. Over 2012–2017, the gravity center of embodied VOCs emissions in gross FCF shifted to the southwest region, with the northwestern and northeastern regions acting as the main engines for the gravity shift. There is a weak decoupling between embodied VOCs emissions and embodied added value in gross FCF. Investment scale and embodied investment efficiency largely inhibit the decoupling, while embodied energy intensity largely promotes the decoupling. Accordingly, we suggest that the northeastern region and northwestern region should be the main targets for VOCs emissions reduction. As such, investment scale, embodied investment efficiency, and embodied emission intensity in FCF should be optimized.

Impacts of the CBAM on EU trade partners: consequences for developing countries

ABSTRACT This article analyses the impact of the introduction of the Carbon Border Adjustment Mechanism (CBAM) on European Union (EU) trade partners, focusing especially on its potential socio-economic and external consequences for developing and emerging economies (EMDEs). It uses trade data and Multi-Regional Input-Output (MRIO) matrices to investigate the geographically and sectorally uneven distribution of CBAM’s potential impacts. The introduction of the CBAM by the EU is still under discussion. This mechanism, which seeks to reduce the incentives for firms to outsource their carbon emissions and promote a more generalised low-carbon transition, might disproportionally expose some non-EU economies. In absolute terms, Russia, China, Turkey, and Ukraine are the main EU trade partners in CBAM products, and hence the most exposed countries in external and socio-economic dimensions. In relative terms, the degree of exposure of economies that export CBAM products to Europe varies substantially, with many developing economies having more than 2% of their exports and 1% of their production impacted by this measure. East European economies, mainly in the Balkans, as well as Mozambique, Zimbabwe, and Cameroon in Africa, are the most exposed as far as the external dimension is concerned. In socio-economic terms, we can also include Morocco and Tajikistan to the group of most exposed economies. In the end, promoting the substitution of highly polluting technologies with green technologies seems notably easier in Europe than in EMDEs. Many jobs, tax revenues, and export revenues will be lost if the CBAM is implemented without taking into account the specificities of the EU’s trading partners. We discuss options to mitigate adverse consequences on EMDEs.