Does Trade Policy Uncertainty Exacerbate Environmental Pollution?—Evidence from Chinese Cities

Yiping Sun,Tengyuan Zhang,Jiawei Fu,Xiangyi Li

doi:10.3390/ijerph19042150

Abstract

Although the relationship between trade and environment has been widely discussed in past studies, trade policy has been in a state of continuous change in recent years. Previous studies have focused on the impact of trade opening or liberalization on the environment, ignoring discussion of the dynamic changes of trade policy. Therefore, it is very important to explore the connection between trade policy changes and environmental pollution for future environmental protection. In order to realize the in-depth study of this mechanism, the paper will try to solve the following three problems: (1) What is the relationship between change in trade policy uncertainty and China’s environmental pollution? (2) What is the mechanism by which trade uncertainty changes environmental pollution? (3) Due to China’s vast territory and regional differences, will changes in trade policy uncertainty have heterogeneous effects due to regional differences? To solve these problems, based on China’s accession to the WTO at the end of 2001, this paper, for the first time, uses PM2.5 concentration data of 246 prefecture-level cities in China to explore the impact of trade policy uncertainty on China’s environmental pollution, then we make an in-depth analysis of the impact path and heterogeneity of urban spatial distribution and city size. We found that, after China’s accession to the WTO, the growth rate of PM2.5 concentration reduced in cities with lower trade policy uncertainty and the inhibition effect was different due to the spatial distribution of city size. A further mechanism test shows that reduction in trade policy uncertainty can improve environmental pollution through industrial, structural and technological effects.

Highlights

Environment is the basis for human survival and development and air pollution is an important factor in environmental problems
The results show that the coefficient of core explanatory variables is significantly negative at the level of 5%, indicating that after China’s entry into the World Trade Organization (WTO), cities with a greater reduction in trade policy uncertainty in the treatment group had a lower increase rate in
The results show that these three variables promoted the increase of PM2.5 concentration, but the effect was not significant

Summary

Introduction

Environment is the basis for human survival and development and air pollution is an important factor in environmental problems. It has become a problem that all countries must pay attention to and needs to be solved. Air pollution caused nearly half a million deaths of infants around the world in 2019, most of them in developing countries, according to the “2020 State of The World’s Air Report”, which notes that the global air quality situation remains severe. Environment Programme (UNEP) points out that emissions of greenhouse gases are far higher than the proposed standards of the “United Nations framework convention” on climate change, and cause global warming, ozone depletion, atmospheric acidification and a series of difficult problems. In 2001, China joined the World Trade Organization (WTO) to enjoy

Methods

Results

Conclusion