Unequal Exchange of Air Pollution and Economic Benefits Embodied in China's Exports

Abstract

As the world's factory, China has enjoyed huge economic benefits from international export but also suffered severe environmental consequences. Most studies investigating unequal environmental exchange associated with trade took China as a homogeneous entity ignoring considerable inequality and outsourcing of pollution within China. This paper traces the regional mismatch of export-induced economic benefits and environmental costs along national supply chains by using the latest multiregional input-output model and emission inventory for 2012. The results indicate that approximately 56% of the national GDP induced by exports has been received by developed coastal regions, while about 72% of air pollution embodied in national exports, measured as aggregated atmospheric pollutant equivalents (APE), has been mainly incurred by less developed central and western regions. For each yuan of export-induced GDP, developed regions only incurred 0.4-0.6 g APE emissions, whereas less developed regions from western or central China had to suffer 4-8 times the amount of emissions. This is due to poorer regions providing lower value added and higher emission-intensive inputs and having lower environmental standards and less efficient technologies. Our results may pave a way to mitigate the unequal relationship between developed and less developed regions from the perspective of environment-economy nexus.