Embodied environmental damage in interregional trade: A MRIO-based assessment within China

A new lifelong accountability system for ecological and environmental damage will be established for local officials in China. However, if this new production-based accountability system does not consider the responsibilities of consumers, it is likely to aggravate the imbalance of regional development. Using a multi-regional input-output model, this paper tracked the environmental damage transfers in interprovincial trade. Trade-related damage from four major pollutants was quantified for each province in 2007. The results show that nearly 45% of the environmental damage that occurs at home to meet consumption in other regions can be ascribed to the interprovincial trade flows in China. In 2007, the North Municipalities, the East Coast, and the South Coast, where the share of production-based environmental damage in relation to the local GDP is lower, transferred environmental damage to the developing Northwest and Central regions to make the local GDP greener via interregional trade, leading to inequality in regional development. It is suggested that the importance of environmental damage from a consumer perspective should be integrated into the future implementation of the new lifelong accountability system.