Worsening Carbon Inequality Embodied in Trade within China

Abstract

The mismatch between trade-embodied economic benefits and CO2 emissions causes carbon inequality, which is seldom analyzed from the intracountry level, especially across a long-term period. This study applied an environmentally extended multiregional input-output model to trace this mismatch and measure the carbon inequality quantitatively within China during 2007-2017. The results show that during the past decade, China’s national carbon inequality was continuously worsening with carbon Gini coefficients rising regardless of production- (0.21-0.30) or consumption-based (0.12-0.18) accounting. The regional carbon inequality was deteriorating, where less developed provinces with 20% of total value-added emitted 32.9% of total CO2 emissions in 2007, while this figure rose to 42.6% in 2017. The eastern provinces (Jiangsu and Shanghai) had entered into net economic and carbon beneficiaries keeping high trade advantages, by contrast the northwest provinces (Ningxia and Xinjiang) were trapped in a lose-lose situation with trade benefits declining by 68%. The southwest provinces (Yunnan and Guangxi) shifted from being net carbon and value-added exporters to net importers, stepping into the earlier development mode of eastern provinces. This hidden and exacerbated carbon inequality calls for regional-specific measures to avoid the dilemma of economic development and CO2 mitigation, which also gives a good reminder for the rising economies, like India.