Environmental cost of consumption in China and India

China and India have transitioned into decisive global demand drivers, yet current frameworks assume final demand triggers uniform environmental responses, not fully capturing the structural realities of varied consumption pathways. Furthermore, standard metrics often fail to distinguish technological inefficiency with structural value-capture constraints. To address these limitations, this study applies a demand-pathway decomposition and a dual-metric diagnostic framework anchored in the Leontief inverse, using the 2023 Asian Development Bank database. This approach captures infinite-order structural dependencies to distinguish domestic final demand (DFD) for intermediate goods from the visible finished-goods trade of foreign final demand (FFD). Results indicate that DFD networks generate emission spillovers up to two and a half times more intensive than their respective FFD pathways. While Chinese elevated intensity stems primarily from structural complexity and low value retention, Indian reflects fundamental technological constraints. Geographic positioning proves equally decisive, empirically identifying a geographical penalty where landlocked suppliers bear emission intensities over three times higher than advanced economies due to compressed value capture. These findings suggest that recalibrating climate governance requires extending policies beyond visible imports to target hidden domestic networks, alongside geography-differentiated strategies explicitly addressing structural value compression. JEL: C67, Q56, F 18