Global environmental inequality: Evidence from embodied land and virtual water trade

The trade-off between economic growth and environmental conservation is the focus of national environmental management. Previous studies have proved that global trade can bring both economic benefits and environmental costs to all countries. However, for different countries, it is not clear whether the environmental costs match their economic benefits in global trade. Also, whether the global trade exacerbates or mitigates the uneven distribution of natural resources among countries need to be further investigated. This study aims to fill these research gaps by providing evidence of global environmental inequality from land and water perspective, thus inspire new thinking on the optimization of global trade patterns. We construct an environmental inequality index based on the world Multi-Regional Input-Output (MRIO) model, and perform a case study for land and water. Results show that most of countries with low per capita land resources are net importers of embodied land, while many countries with extreme water shortages are net exporters of virtual water, such as India, Pakistan, Iran and Egypt, indicating that the global trade encourages the optimal distribution of land resources but exacerbates the uneven distribution of water resources. The environmental cost of developed countries is much lower than that of developing countries compared to their economic gains from global trade, and the inequality of virtual water trade is higher than that of embodied land trade. High-income countries mainly export high value-added products with low environmental costs, while developing countries are just the opposite. We suggest that due to the lack of a unified global natural resource market, resource tax may be an effective means to reduce global environmental inequality and resource mismatch, and policies aimed at reducing environmental inequality can help achieve coordinated management of land and water resources.