Environmental implications of changes in China's inter-provincial trade structure

Interprovincial trade structure keeps changing during the development of domestic market economy in China. As the internal circulation and environmental protection become the theme of China's future development, a shift towards more environment-friendly interprovincial trade structure should be advocated to achieve sustainable economic and environmental development. Previous studies rarely paid attention to the comprehensive influences of interprovincial trade structure change on multiple environmental impacts. Here, we constructed an analytical framework to quantify the influences of trade structure change on national and provincial CO2 emissions, land use and water consumption during 1997-2012 based on the multi-regional input-output analysis. The results showed that inter-provincial trade structure change contributed to the decline in national average carbon intensity and water use intensity, resulting in an overall decrease of CO2 emissions and water use by 313.6 million tons and 2.9 billion m3. However, interprovincial trade structure change made some water-scarce provinces (e.g., Xinjiang, Ningxia, Shaanxi, Jiangsu) undertake water-intensive industries, further exacerbating the uneven distribution of water resources in China. On the contrary, interprovincial trade structure change led to the increase of national average land use intensity, which increased 6.3 million hectares of land use. We suggested that the environment costs of carbon emissions should be further embodied into the commodity prices through carbon tax or carbon market, facilitating the development of low-carbon interprovincial trade structure. Besides, water-intensive industries should be transferred to water-abundant provinces by adjusting the water price in water-scarce provinces. The trade-offs between land and water resources should be made for these eastern regions that took more and more land-intensive industries, as they had high land use efficiency but scarce water resources.