Abstract
Motivations behind a country’s importation of waste are categorized into the pollution haven hypothesis (PHH) and the resource hunting hypothesis (RHH). The importation of wastes can lead to environmental sustainability concerns, requiring governments to intervene when the market fails to reduce the negative externalities by strengthening and implementing environmental regulations. Motivated by China’s position within a rapidly growing but environmentally damaging sector of trade, this paper has three goals: (1) to classify the primary hypothesis that governs China’s flow of traded wastes; (2) to verify the heterogeneous impact of the pollution paradise motivation and resource demand motivation of waste imports from developed and developing countries, and across industries; (3) to assess the impact of domestic environmental regulations on the motives behind China’s waste imports. Using 28 imported waste-varieties from 20 of China’s major trade partners across 24 years, findings indicate that the flow of Chinese waste imports is relatively unresponsive under the pollution haven effect. However, the resource hunting effect from developing countries is significantly greater than what originates from developed countries, despite the laws of 2011 and 2017 established to restrict resource hunting activities. These results have important implications for improving the efficiency of China’s waste sorting and recycling systems.
Highlights
Among researchers and policymakers, expanding global trade and investment has become the fuel that drives concerns of environmental sustainability caused by the flow of production factors across borders
Based on self-reported waste trade data, this study found that an increase in GDP per capita significantly reduced the country’s waste imports, suggesting that motives for wastes trade are captured by pollution haven hypothesis (PHH)
Previous research has sought to explain the motivations of a country, especially China as the world’s largest waste import country, for importing waste products by using two hypotheses—PHH and resource hunting hypothesis (RHH)
Summary
Among researchers and policymakers, expanding global trade and investment has become the fuel that drives concerns of environmental sustainability caused by the flow of production factors across borders. Dominated by concerns of environmental pollution [3] and illegal dumping [4] through traded wastes, the literature remains concentrated on developed countries such as the United States and those in the European Union, while waste trade in developing countries has received limited attention [5]. This is despite developing countries being the lead importers of wastes due to relaxed environmental regulations, low labor costs, and strong demand for resources [2,6].
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