Interregional flows of embodied carbon and value-added in the context of widening north-south disparities in China

Abstract

[Objective] Shifts in embodied carbon and value-added transfers resulting from changes in economic development disparities have received little attention. The relationship between these two factors determines the imbalance in trade flows, making this study highly significant. [Methods] Against the backdrop of the widening economic gap between southern and northern China in 2013, this study utilized an environmentally extended multi-regional input-output model to track the new characteristics of embodied carbon and value-added flows between the two regions. It also employed a structural decomposition method to analyze the dominant industries and related factors driving these changes. [Results] The study revealed that, from 2007 to 2012 and up to 2017, the total volume of embodied carbon transfer between southern and northern China experienced growth. However, after the expansion of the economic gap in 2013, the rapid growth of carbon emissions from the south to the north helped restrain the previous rapid growth rate of net carbon transfer, bringing it to a relative balance. The flow pattern of value added between the two regions shifted from a positive net flow from the south to the north in 2007 and 2012 to a negative net flow in 2017. Furthermore, the power and heat production and supply industry in the north, as well as the petroleum and natural gas extraction industry, were crucial suppliers of both embodied carbon and value added. In contrast, the textile industry and service industry in the south acted as significant producer of embodied carbon and value added. [Conclusion] After the widening of the north-south gap, the south continued to transfer carbon emissions to the north while simultaneously the country experienced a transfer of value added from the north to the south. This resulted in an imbalanced economic benefit and carbon flow situation between the two regions. Future policies related to carbon reduction and trading should prioritize key industries and regions, taking into account a low-carbon consumption lifestyle.

Keywords

• disparities between southern and northern china|embodied carbon transfer|value-added transfer|input-output model|structural decomposition analysis|china