Inequality Evolution of Economic Gains and Environmental Losses in Chinese Interprovincial Trade during 2007-2017

A reduction in SO2 emissions is important for sustainable development. However, China uses territorial emissions to determine its SO2 emission mitigation targets, ignoring the emissions that are incorporated into interregional trade. In addition to the transfer of pollution, value added can also be exchanged with trade, resulting in environmental inequality among regions. In this study, we estimate the embodied SO2 emissions (ESE) under production-, consumption-, and income-based accounting principles and quantify the embodied value added (EVA) within the interprovincial trade during 2007-2017 using the multi-regional input-output (MRIO) model. The inequalities between the ESE and EVA are further investigated using the Gini coefficients method and the regional environmental index method. The results indicate that similar to 34.7-43.4% of SO2 emissions and similar to 24.6-30.8% of value added were triggered by interprovincial trade. Furthermore, developed provinces mainly outsourced their emissions to less developed provinces, particularly to those nearby. Concerning the value added, it was mainly outsourced from less developed provinces to developed provinces during 2007-2010, with no clear patterns observed during 2012-2017. The study's findings indicate that the high inequality of SO2 emissions and value added also occurred between developed and less developed provinces. Particularly, the Gini coefficients of value inflow-SO2 outflow (VISO) were larger than those of value outflow-SO2 inflow (VOSI), which indicated that, besides the direct emissions, consumption-based emissions should be considered when allocating the environmental responsibility among provinces. These findings are valuable for shaping pathways towards achieving regional economic coordination and sustainable development.