Responsibility-sharing and compensation scheme of transboundary water pollution embodied in China's inter-provincial trade: a perspective from economic value capturing.

Transboundary water pollution induced by inter-regional trade is a complex and challenging issue due to the multiple jurisdictions involved. This study combined water pollution discharge inventory, multi-regional input-output analysis, discharge responsibility-sharing, and ecological compensation model to advance the collaborative control of water pollution embodied in China's inter-provincial trade. Over a fifth of China's water pollution discharges in 2017, equivalent to 1376 Kt, were a result of inter-provincial trade, which primarily flowed from wealthier coastal provinces to less developed ones. Moreover, the analysis demonstrates a mismatch between economic gains and environmental costs. In particular, Jiangxi and Guangxi bear the greatest environmental impact (64 and 58 Kt, respectively) while only receiving meager economic returns (131 and 80 billion Yuan). The economic benefit shared responsibility results for the great majority of provinces fell between production- and consumption-based discharges, and this compromise-based allocation of responsibility is more likely to gain acceptance across various regions. Provinces such as Shanghai, Jiangsu, and Beijing necessitate the highest compensation volumes to others, with 31 Kt, 25 Kt, and 20 Kt, respectively, while provinces including Guangxi, Jiangxi, and Ningxia require the largest inflows of compensation, totaling 26 Kt, 23 Kt, and 18 Kt, respectively. The compensation outcomes ensure that less developed regions, bearing a greater pollution burden, receive compensation from more developed regions with lower pollution burdens. The compensation values aligned with compensation volumes, with a few exceptions driven by variations in shadow prices of water pollution. Our study sheds light on the inter-provincial water pollution burdens and benefits and provides a quantitative basis for optimizing the responsibility-sharing and compensation strategies in China, thereby promoting regional cooperation on water pollution control.

Decline of virtual water inequality in China's inter-provincial trade: An environmental economic trade-off analysis.

The trade-off between economic growth and environmental conservation is a significant factor in national environmental management. Previous studies have revealed that there are substantial water resources embodied in the inter-regional trade of China, but there is a scarcity of studies analyzing the cost-benefit inequality in trade, which should be considered when developing water resource allocation and conservation policies. The aim of the present study was to fill the gap in existing research by constructing a novel virtual water inequality index based on the net transfers of virtual water and value added between trading provinces. The results of the present study reveal that the virtual water trade of China accounts for about a third of the annual water use thereof and tends to flow from interior developing provinces to coastal developed provinces. Over 70% of consumption-based water consumption of richer provinces (Beijing, Tianjin and Shanghai) is imported from other regions; however, approximately 60% of the value added triggered by the final consumption of said regions is retained within the region. When trading with rich provinces, several developing provinces with rich water resources, such as Xinjiang and Heilongjiang, not only incur net water outflows but also suffer a negative balance of value added, thereby resulting in the occurrence of virtual water inequality. However, with the coordinated development of China's economy, the problem of virtual water inequality in China's inter-provincial trade has been alleviated to some extent. Advocating water pricing system reform to reflect local water scarcity is suggested, especially in arid regions. Additionally, a virtual water compensation scheme considering cost-benefit inequality in trade may also be a practical solution.

Expansion of environmental impact assessment for eco-efficiency evaluation of China's economic sectors: An economic input-output based frontier approach.

Due to the increasing environmental burdens caused by dramatic economic expansion, eco-efficiency indicating how efficient the economic activity is with respect to its environmental impacts has become a topic of considerable interest in China. In this context, Economic Input-output Life Cycle Assessment (EIO-LCA) and Data Envelopment Analysis (DEA) are combined to assess the environmental impacts and eco-efficiency of China's 26 economic sectors. The EIO-LCA results indicate that Electricity Production and Supply sector is the largest net exporter in energy usage, CO2 emission and exhaust emission categories, while Construction sector is the largest net importer for five impact categories except for water withdrawal. Moreover, Construction sector is found to be the destination of the largest sector-to-sector environmental impact flows for the five impact categories and make the most contributions to the total environmental impacts. Another key finding is that Agriculture sector is both the largest net exporter and the greatest contributor for water withdrawal category. DEA results indicate that seven sectors are eco-efficient while over 70% of China's economic sectors are inefficient and require significant improvements. The average target improvements range between 23.30% and 35.06% depending on the impact category. Further sensitivity analysis reveals that the average sensitivity ratios vary from 7.7% to 15.7% among the six impact categories, which are found to be negatively correlated with their improvement potentials. Finally, several policy recommendations are made to mitigate environmental impacts of China's economic sectors and improve their eco-efficiency levels.