Examining PM2.5 Emissions Embodied in China's Supply Chain Using a Multiregional Input-Output Analysis

Haze has become an urgent problem for China's highly populated cities. Regional collaboration is an effective method for controlling air pollution. Because air pollution diffuses freely, it is necessary to distribute the responsibility for pollution with a common and differentiated rule. Based on a multiregional input-output model, this article calculated the PM2.5 emissions embodied in provincial trade (EEPT) of China's 30 provinces in 2007 and 2010. The results show that the PM2.5 EEPT accounts for almost one-third of the production-based PM2.5 emissions of China. The economic crisis lowered the EEPT, while the ratio between the EEPT and production-based PM2.5 emissions has increased. The EEPT values of the eastern provinces are mainly due to the EEPT embodied in final consumption, while the EEPT values of the central, northeastern, and the western provinces are due to the EEPT embodied in the intermediate input. We also analyzed different compositions of EEPT, such as fixed capital formation and consumption. The emissions embodied in provincial imports are mainly due to fixed capital formation. Due to the policies of the West Development, the Rising of Central China, and Promoting the Old Industrial Base in the Northeast, the central government increased the investment to these areas. The ratios of the EEPT embodied in the fixed capital formation to the total EEPT of the central (0.64), northeastern (0.69), and the western provinces (0.65) are higher than that of the eastern provinces (0.62). This indicates that the government need to establish different policies to control the effects of EEPT. In addition to the challenges of regional collaboration, environmental damage and the EEPT should be taken into account. The importers in the collaboration should consider providing compensation to the exporters in the collaboration.