China’s mega-city clusters grab water resources and carbon credit from vulnerable hinterlands

Sustainable cities (SDG 11) demand equitable resource governance, yet existing studies neglect hidden environmental costs embedded in inter-regional trade. Using a multi-regional Input-Output (MRIO) model, we analyze China’s virtual water (VW) and virtual carbon credit (VCC) flows (2002-2017). We propose the Environment-Trade Comparative Advantage (ETCA) index to embed ecological indicators into trade analysis. Results reveal 72% of VW and 85% of VCC flow from water-scarce northern regions to affluent coastal cities, suppressing exporters’ GDP by 6-9% annually a pattern mirroring Global North-South exploitation. Traditional metrics overvalue resource-intensive sectors by 18-35%, while ETCA prioritizes regions with balanced ecological-economic efficiency. Policy simulations show ETCA-guided compensation could reduce disparities by 22-40%, and water-carbon labeling empowers sustainable consumption. This work addresses SDG 11’s blind spot uncounted virtual resource flows and redefines urban sustainability monitoring. Findings urge integrating ETCA into SDG frameworks to prevent trade-driven inequities, offering a model for Global South cities pursuing post-SDG resilience.