In this study, we apply the inter-regional input-output model to explain the relationship between China's inter-regional spillover of CO2 emissions and domestic supply chains for 2002 and 2007. Based on this model, we propose alternative indicators such as the trade in CO2 emissions, CO2 emissions in trade and the regional trade balances of CO2 emissions. Our results do not only reveal the nature and significance of inter-regional environmental spillover within China's domestic regions but also demonstrate how CO2 emissions are created and distributed across regions via domestic and global production networks. Results show that a region's CO2 emissions depend on its intra-regional production technology, energy use efficiency, as well as its position and participation degree in domestic and global supply chains. (C) 2013 Elsevier Ltd. All rights reserved.