Study on the Impact of the Export of China’s Final Use Products on Domestic SO2 Emissions

Since China’s accession to the World Trade Organization (WTO), its export volume has achieved rapid growth. Meanwhile, the manufacturing of export products has also resulted in a large amount of SO2 emissions in China. To explore the relationship between the export of China’s final use products (ECFuP) and SO2 emissions, this paper first used the Multi-Regional Input–output (MRIO) model to study the SO2 emissions caused by ECFuP during 2003–2011. Then, this paper uses Structural Decomposition Analysis (SDA) to decompose the factors affecting SO2 emission into technical effect, structural effect and scale effect. The results showed that (1) the amounts of China’s SO2 emissions caused by the ECFuP have increased (2003–2007), declined (2007–2009), and increased again (2009–2011). (2) Scale effect is the main factor that causes the increase of SO2 emissions in China; technical effect mainly resulted in a decrease of emissions, whereas structural effect has less impact. Specifically, from 2003 to 2011, scale effect increased domestic SO2 emissions by 2.2 million tons; technical effect and structural effect reduced by 2.4 million tons and 0.5 million tons of emissions, respectively. (3) For different regions, there is a positive correlation between the consumption of the ECFuP and China’s SO2 emissions. Among them, NAFTA (accounting for 33.77%) leads to the largest SO2 emissions, and OTHER EU (5.79%) is the least. (4) From the industrial aspect, some industries with relatively small ECFuP have caused high SO2 emissions. The specific performance is as follows, among the 17 industries, Electricity, Gas and Water Supply (EGW) only occupied 0.6% of the total ECFuP, but it has the largest SO2 emissions (55%); in contrast, while Electrical and Optical Equipment (EOE) occupied 42% of the total ECFuP, its SO2 emissions only accounted for 0.2% of the total. In 2003–2011, the export trade volumes of all the industries increased, but the growth rates of less polluted industries are higher than that of heavy polluted industries. Based on the above findings, the paper also proposed some policy recommendations.


Methods and Data Sources
To analyze the relationship between the ECFuP and SO 2 emissions, and to decompose the influencing factors, this paper uses the Multi-Regional Input-Output (MRIO) model and Structural Decomposition Analysis (SDA) to study them.

Basic Input-Output Model
This paper uses MRIO model [32][33][34] to study the impact of the ECFuP on China's SO 2 emissions. First, a multi-regional environmental input-output table is constructed. The specific structure is shown in Table 1. Note: V 1 , V 2 , . . . , V m represent the added value of region 1, region 2, ..., region m, respectively.
In the MRIO table, i and j are used to indicate the production industries, and r and s are countries or regions. The main input-output relationship equation of production in country r is X r i = j x r ij + y rr i + s y rs i (i, j = 1, 2, · · · , n)(r, s = 1, 2, · · · , m) (1) where x r ij represents the intermediate demand of the industry j for the industry i in country r, y rr i represents that the industry i satisfies the final use volume of country r itself, y rs i represents the amount of export required by the industry i of the country r to meet the final use needs of the country s, and X r i represents the total output of the industry i in country r. Combined with the input-output table used in this paper, we get Equation (2) where (I − A) −1 is the Leontief inverse matrix, also known as the complete consumption coefficient represents the total output matrix of m countries or regions; Y = represents the direct consumption coefficient matrix between industries, which is provided by p-zone to q-zone. To meet the final consumption of the region s, the production required in each region is Then, we can deal with Equation (3) and get the following series of equations, In this paper, we study the impact of the ECFuP on China's industrial SO 2 emissions. We set region 1 as China, m = 7. So, in the case of considering only region 1 (see the shaded column in Table 1), we can get the following equations, Considering that the trade volumes of intermediate goods in many industries between China and other regions are very small. Based on the above reason, and for the convenience of calculation, we assume that A 12 X 2s , . . . , A 17 X 7s are zero in this paper. Then, we get the following Equation (4), Then, to meet the final use capacity of the region s, the amount China needs to produce is Using i. After that, the SO 2 emission coefficient column vector can be obtained. Let E T be the transformation matrix of E 1 , and make G = diag e 1 1 , · · · , e 1 n = . Therefore, to meet the final use of region s, the SO 2 emission coefficient matrix of China is Furthermore, to meet the final use of region s, China's total SO 2 emissions are as follows, At the same time, it can be concluded that in order to meet the final use of the region s, the SO 2 emission vector for different sectors in China is

Structural Decomposition Analysis (SDA)
In the specific application of the SDA method, it includes various deformation forms such as LMDI, SSA, and D&L. Based on the research of Pang Jun [30], this paper uses the LMDI method to decompose and analyze the factors affecting SO 2 emissions in China.
In this paper, we assume that M 1s is the total amount of final use products that China provides to region s, and P 1s i is the proportion of the final usage provided by China's industry i to the total final usage. Then we can get following equations, In formula (12), ES 1s i indicates SO 2 emissions caused by China's i industry due to the final use products supplied to the region s. It can be further expressed as the product of SO 2 emission coefficient, export structure, and export scale.
Therefore, in order to provide the final use products for the region s, the SO 2 emissions change from t 1 to t 2 in the industry i is After that, ∆ES 1s i can be further decomposed into the sum of technical effect, structural effect, and scale effect.
T e f f i i , respectively, represent the impact of SO 2 emission intensity change, supply structure change, and total supply scale change on the change of SO 2 emissions in industry i, that is, the contribution of technical effect, structural effect, and scale effect to the change of SO 2 emissions.
The total SO 2 emissions change is

Data Sources
The  [36], because the release 2013 in this database is only counted to 2011, thus the data before 2011 is selected. Based on the above two factors, the research period of this paper is from 2003 to 2011.
In addition, this paper takes 2000 as the base period and uses GDP deflator to process the data in input-output tables of different years. The GDP deflator index used in the paper comes from China Statistical Yearbook 2018 [37].
It should be noted that this paper refers to the research of Huang [38], assuming that the SO 2 emissions of the primary and tertiary industries are zero, and only the SO 2 emissions of the secondary industry are studied. Besides, based on 17 industrial sectors listed in the MRIO table, this paper integrates the industries listed in China Statistical Yearbook on Environment and abbreviates the names of the 17 industries used in the paper (see Table 2).  The "China Statistical Yearbook on Environment" does not show data on SO 2 emissions in the "Construction" industry. Thus, this paper considers "Other Sectors" as "Construction".

Results and Discussions
To understand the impact of the ECFuP on industrial SO 2 emissions during 2003-2011, we conduct our studies from overall perspective, regional perspective, and industrial perspective in this section.

Analysis of the Overall SO 2 Emissions Caused by the ECFuP
This section will analyze the SO 2 emissions caused by the ECFuP from an overall perspective, that is, we consider the six regions as a whole. Figure 1 shows the volume of the ECFuP and its changes during 2003-2011. The gray module shows the increase of export volume in that year compared with the previous year, and the dotted line module shows the decrease of export volume in that year compared with the previous year.

Analysis of the ECFuP and SO 2 Emissions from the Overall Perspective
As can be seen from Figure 1, the export volume in 2009 had declined, whereas it has grown in other years. Specifically, the volume of the ECFuP increased steadily in 2003-2008, with an average annual growth rate of 18.96%. Among them, the faster growth was from 2005 to 2007, with an annual growth rate of more than 20%. The above data showed that China had fully utilized the demographic dividend and comparative advantage after joining the WTO in 2001 [39], and its export volume had achieved rapid growth.
3.1.1. Analysis of the ECFuP and SO2 Emissions from the Overall Perspective Figure 1 shows the volume of the ECFuP and its changes during 2003-2011. The gray module shows the increase of export volume in that year compared with the previous year, and the dotted line module shows the decrease of export volume in that year compared with the previous year. Although the export volume was still growing in 2008, the growth rate had dropped to 6.89%. In 2009, there was negative growth. This showed that under the influence of the 2008 financial crisis, the economic development of various countries had been adversely affected to varying degrees, and the demand for Chinese products had also decreased.
In 2010-2011, with the gradual recession of the financial crisis and the recovery of regional economy, the demand for China's final use products (CFuP) began to rise in all regions. With the stimulating effect of a series of policy measures such as Chinese government's export tax subsidies [40], the export volume began to grow rapidly again, and the growth rate also turned positive again.
To study the SO 2 emissions caused by the ECFuP, this paper shows the SO 2  As can be seen from Figure 1, the export volume in 2009 had declined, whereas it has grown in other years. Specifically, the volume of the ECFuP increased steadily in 2003-2008, with an average annual growth rate of 18.96%. Among them, the faster growth was from 2005 to 2007, with an annual growth rate of more than 20%. The above data showed that China had fully utilized the demographic dividend and comparative advantage after joining the WTO in 2001 [39], and its export volume had achieved rapid growth.
Although the export volume was still growing in 2008, the growth rate had dropped to 6.89%. In 2009, there was negative growth. This showed that under the influence of the 2008 financial crisis, the economic development of various countries had been adversely affected to varying degrees, and the demand for Chinese products had also decreased.
In 2010-2011, with the gradual recession of the financial crisis and the recovery of regional economy, the demand for China's final use products (CFuP) began to rise in all regions. With the stimulating effect of a series of policy measures such as Chinese government's export tax subsidies [40], the export volume began to grow rapidly again, and the growth rate also turned positive again.
To study the SO2 emissions caused by the ECFuP, this paper shows the SO2 emissions and their changes from 2003 to 2011 in Figure 2. The gray module indicates the increase of SO2 emissions in that year compared with the previous year, and the dotted line module indicates the decrease of SO2 emissions in that year compared with the previous year. To analyze the factors affecting the SO2 emissions and the influence degree of different factors, this paper used formula (10) to formula (19) to calculate the influencing factors from three aspects: technical effect, structural effect and scale effect. Figure 3 shows the results of the calculation, which To analyze the factors affecting the SO 2 emissions and the influence degree of different factors, this paper used formula (10) to formula (19) to calculate the influencing factors from three aspects: technical effect, structural effect and scale effect. Figure 3 shows the results of the calculation, which shows the impact of technology, export structure, and export scale on SO 2 emissions in different periods. The column above the abscissa axis represents the increase of SO 2 emissions, whereas the column below the axis represents the decrease of SO 2 emissions. The inflection point of the black line in the figure represents the total effect of three factors on SO 2 emissions.  Table 2 for the full name) all caused a decrease of the structural effect, while the increase of the structural effect was negligible. The above data showed that, compared with 2005, the export share of high-polluting industries, such as EGW, CPN, ONMM, and BMFM, significantly decreased in 2007, which was also the main reason for the overall reduction of the structural effect.
In general, in 2003-2011, the scale effect was the main factor causing the increase of SO2 emissions in China, while the technical effect was the main factor causing the reduction of emissions. Furthermore, we can give a more precise explanation of the results of Section 3.1.1. In 2005-2007, the volume of the ECFuP increased rapidly, but the growth of SO2 emissions gradually slowed down; this was due to the dual role of export structure and technological progress. In 2008, with the increase of export volume, SO2 emissions decreased dramatically, which was due to the progress of production technology. In 2009, the emission of SO2 decreased greatly, which was the dual effect of technological progress and the reduction of export scale. After 2009, advances in technology continued to play a pivotal role in reducing SO2 emissions.   Table 2 for the full name) all caused a decrease of the structural effect, while the increase of the structural effect was negligible. The above data showed that, compared with 2005, the export share of high-polluting industries, such as EGW, CPN, ONMM, and BMFM, significantly decreased in 2007, which was also the main reason for the overall reduction of the structural effect.
In general, in 2003-2011, the scale effect was the main factor causing the increase of SO 2 emissions in China, while the technical effect was the main factor causing the reduction of emissions. Furthermore, we can give a more precise explanation of the results of Section 3.1.1. In 2005-2007, the volume of the ECFuP increased rapidly, but the growth of SO 2 emissions gradually slowed down; this was due to the dual role of export structure and technological progress. In 2008, with the increase of export volume, SO 2 emissions decreased dramatically, which was due to the progress of production technology. In 2009, the emission of SO 2 decreased greatly, which was the dual effect of technological progress and the reduction of export scale. After 2009, advances in technology continued to play a pivotal role in reducing SO 2 emissions.
3.2. Analysis of the ECFuP and SO 2 Emissions from the Regional Perspective From a regional perspective, the analysis of the ECFuP and SO 2 emissions not only revealed China's major trade areas, but also the impact of the region on China's SO 2 emissions. In addition, we can also analyze the change of trade degree between different regions and China from a vertical perspective, and get the change of China's trade direction. Figure 4 shows the proportion of CFuP exported to six regions, with different colors representing different regions.          North America has always been an important export area for China. In 2018, China's total exports to the United States and Canada reached 513.58 billion US dollars, accounting for more than 5  North America has always been an important export area for China. In 2018, China's total exports to the United States and Canada reached 513.58 billion US dollars, accounting for more than 20% of China's total exports in the same year [41]. With the establishment of the North American Free Trade Zone (NAFTA), the "creative effect" has led to a steady increase in labor productivity and technical efficiency in the region. At the same time, it has also stimulated demand for Chinese products. However, with the continuous development of the integration process of free trade area, preferential treatment of Mexican textiles, household appliances, and other products by the United States and Canada put China in a relatively unfavorable competitive position [42]. In addition, after the 2008 financial crisis, trade frictions between China and developed countries such as the United States increased, and anti-dumping lawsuits faced by Chinese enterprises also increased [43]. Therefore, although NAFTA has always been the largest export area of China's final use products, its proportion is gradually decreasing, which also leads to a simultaneous decrease in the proportion of SO 2 emissions.
In 2003-2011, China's exports to BRIIAT and ROW increased year by year. By 2011, the consumption shares of the two regions had increased by 9.76% and 9.5%, respectively. There are some reasons for this change. For BRIIAT, one reason is that China is establishing free trade zones with countries in BRIIAT step by step, reducing trade barriers and increasing trade exports. Such as China-Australia Free Trade Area Negotiation [44], China-India Joint Trade Arrangement Project [45], and the China-ASEAN Free Trade Agreement. Another reason is the convergence of political positions and the complementary resources, which also promotes a more stable trade between China and some countries of BRIIAT [43]. These factors provide more opportunities for China to export to these countries, and also promote more final use products to enter these countries.
For ROW, the region includes many developing countries. As the fastest-growing developing country, China's influence on these countries has become more obvious, and trade with these countries has become increasingly close. The increase in the proportion of exports in the region also indicates that trade between China and developing countries is deepening.  Table 2.
industries. In this figure, the 17 industries on the left are arranged in descending order of SO2 emissions, and the right side lists the six regions of trade. The size of the 17 modules on the left represents the amount of SO2 emissions caused by 17 industries, respectively. Similarly, the size of the six modules on the right side represents the SO2 emissions caused by each of the six regions. The width of the connecting bar (from left to right) represents the amount of SO2 emission affected by different regions in the industry. The full names of all the 17 industries are shown in Table 2. As can be seen from Figure 6, high pollution industries, such as electric power and gas production (EGW), metal smelting (BMFM), textile industry (TTP), chemical industry (CCP, CPN), paper-making and printing (PPP), and ore mining and processing (MQ, ONMM), were the industries that cause large SO2 emissions in China. Among them, the most discharged industry was EGW, which had an average emission of 1.28 million tons/year, accounting for 55% of the total annual emissions of all industries. Then followed by BMFM (14%), CCP (9%), TTP (5%), ONMM (5%), CPN (4%), PPP (3%), MQ (2%), and FBT (2%).  Figure 7 shows the average export volume of 17 industries to six regions during the 9-year period (2003)(2004)(2005)(2006)(2007)(2008)(2009)(2010)(2011). In this figure, the left side is still sorted according to the order of SO 2 emissions, and the right side represents six regions. The module size and the width of the connecting bar represent the export amount. Metal manufacturing (MN, MNR, EOE, etc.) and wood processing (WPWC) industries caused relatively less pollution. The emissions from LLF, WPWC, RP, MN, EOE, TE, MNR, and CON were only between 46200 and 68200 tons per year, accounting for 2.07-3.01% of the total. In particular, the annual SO2 emissions from MNR and CON were only 0.02-0.04%. This paper calculates the export volume of 17 industries to six regions during 2003-2011. Then, we use the nine-year average of export to map the trade between China and six regions, as shown in Figure 7. Figure 7 shows the average export volume of 17 industries to six regions during the 9-year period (2003)(2004)(2005)(2006)(2007)(2008)(2009)(2010)(2011). In this figure, the left side is still sorted according to the order of SO2 emissions, and the right side represents six regions. The module size and the width of the connecting bar represent the export amount. Combining the export volume of various industries, industries with relatively small export volumes have led to high SO2 emissions, such as EGW and BMFM. The sum of the seven industries increased from 13.59 billion in 2003 to 32.58 billion in 2011, but their shares of total exports fell from 7% to 6%. However, the export volume of industries that contributed less to SO2 emissions, such as EOE, MN, MNR, LLF, TE, and RP, was very large. Their sum increased from 132.21 billion in 2003 to 373.40 billion in 2011, and the export share increased from 65.10% to 69.60%, with an average of 68.25%. The above data shows that although the foreign trade of all industries is increasing, the export growth rate of less polluted industries is significantly higher than that of heavily polluted industries, which also means that China's export structure is continually optimized.
Moreover, this article found that Textiles and Textile Products (TTP) industry is a relatively special industry. It is not only an industry with high SO2 emissions, but also an industry with a large export volume. Through the analysis of this industry, we find two main reasons for the situation. First, the chemical fiber process requires a large number of sulfurized synthetic materials, coupled Combining the export volume of various industries, industries with relatively small export volumes have led to high SO 2 emissions, such as EGW and BMFM. The sum of the seven industries increased from 13.59 billion in 2003 to 32.58 billion in 2011, but their shares of total exports fell from 7% to 6%. However, the export volume of industries that contributed less to SO 2 emissions, such as EOE, MN, MNR, LLF, TE, and RP, was very large. Their sum increased from 132.21 billion in 2003 to 373.40 billion in 2011, and the export share increased from 65.10% to 69.60%, with an average of 68.25%. The above data shows that although the foreign trade of all industries is increasing, the export growth rate of less polluted industries is significantly higher than that of heavily polluted industries, which also means that China's export structure is continually optimized.
Moreover, this article found that Textiles and Textile Products (TTP) industry is a relatively special industry. It is not only an industry with high SO 2 emissions, but also an industry with a large export volume. Through the analysis of this industry, we find two main reasons for the situation. First, the chemical fiber process requires a large number of sulfurized synthetic materials, coupled with the imperfection of techno logy and equipment, resulting in a large number of SO 2 emissions. Second, as the world's factory, China's textile and garment industry exports have long been ranked first in the world, and the scale of exports has been expanding, which has brought a large amount of exports [46]. These indicate that if China wants to develop textile manufacturing under the condition of guaranteeing the export trade volume, it still needs to invest more efforts in equipment renewal and innovation funds.

Conclusions and Recommendations
Based on the MRIO model and LMDI method, this paper analyzed the domestic SO 2 emissions caused by the ECFuP from 2003 to 2011, and divided the factors affecting SO 2 emissions into three aspects: technology, export structure, and export scale. The conclusions are as follows.
First Fourth, from the industrial aspect, there is no positive relation between ECFuP and SO 2 emissions. Some industries with relatively small ECFuP have led to high SO 2 emissions. The specific performance is as follows; among the 17 industries, EGW only occupied 0.6% of the total ECFuP, but it has the largest SO 2 emissions (55%); in contrast, although EOE occupied 42% of the total ECFuP, its SO 2 emissions only accounted for 0.2% of the total. Fifth, the export volumes of all industries are increasing, but the growth rate of less polluted industries are significantly higher than that of heavy polluted industries. The export structure of China is constantly optimized. From 2003 to 2011, although the total export volume of seven heavy polluted industries, namely, EGW, BMFM, CCP, ONMM, CPN, PPP, and MQ, increased from 1.359 billion to 3.258 billion, the proportion of total exports decreased from 7% to 6%. At the same time, the proportion of low-pollution industries (EOE, MN, MNR, LLF, TE, and RP) increased from 65.10% in 2003 to 69.60% in 2011.
In response to the above research conclusions, this paper proposes the following recommendations. First, as the scale effect of ECFuP may still be negative in the near future, technical effect and structural effect are the main methods for decreasing SO 2 emissions. Thus, more works are needed to improve related technologies, and to optimize the export structure.
Second, in three regions (i.e., BRIIAT, EURO-ZONE, and ROW) during 2003-2011, the increased proportion of SO 2 emission is less than that of the ECFuP. It implies that, from a regional perspective, there are higher environmental efficiencies when exporting products to these three regions. Therefore, the Chinese government should consider more about developing trade with these three regions, especially with the ROW region, which includes many developing countries.
Third, the export volumes of EGW and BMFM are smaller than other industries, but they bring more SO 2 emissions. Therefore, the Chinese government needs to pay more attention to its tariff