Lowcarbon development has increasingly become an international consensus. Carbon border adjustment mechanism advanced by developed economies such as the European Union have, in effect, created green trade barriers that threaten China's foreign trade and industrial production. Due to differences in industrial specialization and energy structures, various regions in China can experience heterogeneous impacts, and their decarbonization costs and benefits likewise differ, requiring nuanced strategies considering both overall economic implications and regional disparities. This paper constructs a spatial structure model that integrates China's domestic carbon market, international carbon tariffs, global input-output linkages, and interregional factor mobility. It quantitatively evaluates, under unilateral and plurilateral policy scenarios, how carbon tariffs affect regional economic disparities and explores China's strategic options. This paper finds that the EU's carbon tariff imposes significantly uneven shocks across regions: northern provinces that supply energy-intensive upstream products are hardest hit, thereby widening the north-south income gap. The emergence of a climate club among major developed economies delivers a pronounced negative shock to China's trade interests. Conversely, China's participation in such a club and the acceleration of its own green lowcarbon transition can substantially mitigate overall—and particularly southeastern—income declines, even as they exacerbate economic losses in the northwest and northeast. Finally, this paper examines the effectiveness of horizontal compensation mechanisms and policies to strengthen domestic circulation, offering insights for effectively responding to shifts in global green trade rules and for jointly advancing green, lowcarbon transformation and regional coordinated development.
Qin et al. (Sun,) studied this question.