Mismatched Social Welfare Allocation and PM_2.5-Related Health Damage along Value Chains within China

Abstract

Value chains have played a critical part in the growth. However, the fairness of the social welfare allocation along the value chain is largely underinvestigated, especially when considering the harmful environmental and health effects associated with the production processes. We used fine-scale profiling to analyze the social welfare allocation along China’s domestic value chain within the context of environmental and health effects and investigated the underlying mechanisms. Our results suggested that the top 10% regions in the value chain obtained 2.9 times more social income and 2.1 times more job opportunities than the average, with much lower health damage. Further inspection showed a significant contribution of the “siphon effect”major resource providers suffer the most in terms of localized health damage along with insufficient social welfare for compensation. We found that inter-region atmosphere transport results in redistribution for 53% health damages, which decreases the welfare-damage mismatch at “suffering” regions but also causes serious health damage to more than half of regions and populations in total. Specifically, around 10% of regions have lower social welfare and also experienced a significant increase in health damage caused by atmospheric transport. These results highlighted the necessity of a value chain-oriented, quantitative compensation-driven policy.