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

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.

Collaborative governance of trade-driven transboundary air pollution in China: A responsibility-based fair compensation mechanism

Transboundary air pollution poses a significant challenge in China, and collaborative governance presents a promising approach to tackle this problem. However, such approach is rarely implemented due to the influence of inter-regional trade dynamics. To address this issue, a comprehensive, responsibility-based fair compensation mechanism was established in the present study. The aim of the mechanism is to bridge the existing gap through the integrated utilization of air pollutant emission inventories, multi-regional input-output analysis, emission responsibility allocation, and an ecological compensation model. In 2017, approximately 50% of China's air pollutant emissions were embedded in inter-provincial trade, primarily originating from wealthier provinces and directed towards less-developed regions with higher pollution intensity. There exists a significant imbalance between the inter-provincial transfers of air pollution and economic benefits, owing to which Inner Mongolia and Liaoning have suffered from serious environmental inequity brought about by trade. The allocation of responsibility for trade-related emissions between producers and consumers is determined by the economic surplus they gain from trade. Such approach results in an intermediate outcome that falls between production-based and consumption-based emissions for the majority of provinces. The scheme highlights the import-related share of responsibility for economically developed provinces and the export-related share for less-developed, pollution-intensive provinces, which can primarily be attributed due to their differences in value chain specialization. The inter-provincial compensation volumes for trade-related emissions are determined based on the economically equitable emission responsibility sharing scheme. More developed provinces, characterized by industrial structures focused on low-pollution, high-value-added products, primarily function as compensation providers. In contrast, less-developed provinces with higher pollution intensity seek compensation from these more affluent regions. The present findings can offer a quantitative basis for the ecological compensation and collaborative control mechanism of trade-driven transboundary air pollution in China.

Driving forces and variation in water footprint before and after the COVID-19 lockdown in Fujian Province of China

The COVID-19 outbreak has injured the global industrial supply chain, especially China as the world's largest manufacturing base. Since 2020, China has implemented a rigorous lockdown policy, which has sternly damaged sectoral trade in export-oriented coastal areas. Fujian Province, which mainly processes imported materials, has a more profound influence. Although the COVID-19 lockdown has had some detrimental consequences on the world economy, it also had some favorable benefits on the global ecology. Previous studies have shown that the lockdown has altered the physical water quantity and quality, but the lack of total, virtual, and physical water research that combines water quantity and water quality simultaneously to pinpoint the subject and responsibility of water resources consumption and pollution. This research quantified the physical, virtual, and total water consumption and water pollution among 30 sectors in Fujian Province based on the theory of water footprint and the Economic Input-Output Life Cycle Assessment model. SDA model was then used to investigate the socioeconomic elements that underpin variations in the water footprint. The results show that after the lockdown, the physical water quantity and the physical grey WF in Fujian Province decreased by 2.6 Gm3 (-6.7%) and 0.4 Gm3 (-1.3%) respectively. The virtual water quantity decreased by 2.3 Gm3 (-4.5%), whereas the virtual grey WF rose by 1.5 Gm3 (4.3%). The total water quantity dropped by 3.3 Gm3 (-4.9%), while the grey WF increased by 1.2 Gm3 (2.5%), i.e. the COVID-19 lockdown decreases physical water quantity and improves local water quality. More than 50% of the water comes from virtual water trade outside the province (virtual water is highly dependent on external), and around 60% of the grey WF comes from physical sewage in the province. The COVID-19 lockdown reduced water outsourcing across the province (paid nonlocally decrease) but increased pollution outsourcing (paid nonlocally increase). And gross capital formation's contribution to the growth in water footprint will continue to rise. As a result, this study suggested that Fujian should take advantage of sectoral trade network to enhance the transaction of green water-intensive intermediate products, reduce the physical water consumption of blue water-intensive sectors, and reduce the external dependence on water consumption. Achieving the shared responsibility of upstream and downstream water consumption and reducing the external dependence on water in water-rich regions is crucial to solving the world's water problems. This research provides empirical evidence for the long-term effects of COVID-19 lockdown on the physical and virtual water environment.

A factorial-based dynamic distributive model for virtual-water management in multi-urban agglomerations - A case study of Yangtze River Economic Belt

The economic development, population growth and rapid urbanization in the Yangtze River Economic Belt (YREB) have resulted in an imbalance between socio-economic development and available water resources of adjacent urban agglomerations. Exploring the virtual water flow (VWF) of adjacent urban agglomerations in YREB is crucial for the collaborative management of water resources. In this study, a factorial-based dynamic distributive model (FDDM) is first developed to analyze the variations in virtual water transfers and inter/inner-sectoral relationships within multi-urban agglomerations, and expound the spatiotemporal diffusion effects of multiple water policy alternatives (and their combinations) for virtual water. The FDDM is applied in YREB's urban agglomerations covering Yangtze River Delta (YRDA), Middle Reach of Yangtze River (MRA) and Chengyu Urban Agglomeration (CYA). The FDDM is capable of i) quantifying the dynamic evolution of direct/indirect virtual water volume and virtual water transfer direction/path between and within urban agglomerations; ii) demonstrating the spatiotemporal changes of the control/dependent relationship within sectors in sub-urban agglomerations, as well as the evolution of utility relationship within the system; iii) evaluating the interactions of different water policies (and their combinations) within each sub-urban agglomeration/key sectors on the direct and indirect virtual water consumption of the system. Our major findings are: (i) YRDA always has the largest direct and indirect water consumption as well as the water consumption intensities from 2007 to 2017; (ii) The three national urban agglomerations have evolved in the direction of benign development; (iii) the interactions between YRDA and MRA, YRDA_FLF (sector of farming, forest, livestock, and fishery in YRDA) and MRA_FTO (sector of food and tobacco processing in MRA) on VWF are obvious. These results will provide a new insight for balancing urban agglomeration development and water resource utilization in YREB.

The "Gravity" for global virtual water flows: From quantity and quality perspectives

The virtual water trade (VWT) has been proposed as a means of balancing national water budgets while also saving water globally. Since humans require both sufficient quantity and quality of water, the drivers of VWT flows should be thoroughly examined, including its three components. Multiregional input-output (MRIO) and gravity methods are used to investigate the influence of multiple factors on the green, blue, and grey water trading flows among 177 countries in 2014. Several factors were found to be strongly correlated with the grey water trade, offering valuable insight into water resource management, especially about water pollution. The findings verify the driving effects of socio-economic status and agricultural activities on virtual water trade. The study shows that the influence of water resources endowment on the virtual water trade flow is relatively small compared to economic structure in determining virtual water trade flows. The paper contributes to the research on the interaction between virtual water trade and various factors, which can assist decision-makers in optimizing economic structure by integrating water quantity and quality factors and realize sustainable management of water resources.

Virtual Water Flow Pattern in the Yellow River Basin, China: An Analysis Based on a Multiregional Input-Output Model

Research on the Yellow River Basin's virtual water is not only beneficial for rational water resource regulation and allocation, but it is also a crucial means of relieving the pressures of a shortage of water resources. The water stress index and pull coefficient have been introduced to calculate the implied virtual water from intraregional and interregional trade in the Yellow River Basin on the basis of a multi-regional input-output model; a systematic study of virtual water flow has been conducted. The analysis illustrated that: (1) Agriculture is the leading sector in terms of virtual water input and output among all provinces in the Yellow River Basin, which explains the high usage. Therefore, it is important to note that the agricultural sector needs to improve its water efficiency. In addition to agriculture, virtual water is mainly exported through supply companies in the upper reaches; the middle reaches mainly output services and the transportation industry, and the lower reaches mainly output to the manufacturing industry. Significant differences exist in the pull coefficients of the same sectors in different provinces (regions). The average pull coefficients of the manufacturing, mining, and construction industries are large, so it is necessary to formulate stricter water use policies. (2) The whole basin is in a state of virtual net water input, that is, throughout the region. The Henan, Shandong, Shanxi, Shaanxi, and Qinghai Provinces, which are relatively short of water, import virtual water to relieve local water pressures. However, in the Gansu Province and the Ningxia Autonomous Region, where water resources are not abundant, continuous virtual water output will exacerbate the local resource shortage. (3) The Yellow River Basin's virtual water resources have obvious geographical distribution characteristics. The cross-provincial trade volume in the downstream area is high; the virtual water trade volume in the upstream area is low, as it is in the midstream and downstream areas; the trade relationship is insufficient. The Henan and Shandong Provinces are located in the dominant flow direction of Yellow River Basin's virtual water, while Gansu and Inner Mongolia are at the major water sources. Trade exchanges between the midstream and downstream and the upstream should be strengthened. Therefore, the utilization of water resources should be planned nationwide to reduce water pressures, and policymakers should improve the performance of agricultural water use within the Yellow River Basin and change the main trade industries according to the resource advantages and water resources situation of each of them.

Revealing Virtual Water Transfers and Imbalanced Economic Benefits Hidden in China’s Interprovincial Trade

Interprovincial trade has expanded China’s virtual water consumption and economic development. This study uses an environmental–economic inequality index to calculate the virtual water and economic benefit transfer imbalances in interprovincial trade and applies a structural path analysis (SPA) model to find the imbalances on the key virtual water supply chain paths between provinces. The findings are fourfold. (1) The developed provinces, such as Guangdong, Jiangsu, and Shandong, had more virtual water on the consumption side from 2002 to 2017 and had the most value added on the consumption and production sides. (2) The developing provinces in northwest and central China suffered from net virtual water outflows and negative value-added gains in bilateral trade with developed provinces. (3) The developed provinces, such as Beijing, acquired more virtual water from other provinces in 0–5 production tiers, but only a small part of the value added was transferred out. (4) All of the four top ranking virtual water supply chain paths of Beijing came from other provinces, accounting for 28.22% of the total virtual water flowing to Beijing, but their value added only accounted for 1.44%. It is suggested that provinces adopt differentiated water-use systems to reduce virtual water transfer imbalances and provide subsidies to the nodes to compensate the economic benefits on key virtual water supply chain paths.