Abstract
China is a large import and export economy in global terms, and the carbon dioxide emissions and carbon leakage arising from trade have great significance for China’s foreign trade and its economy. On the basis of trade data for China’s 20 industrial sectors, we first built a panel data model to test the effect of trade on carbon dioxide emissions and the presence of carbon leakage for all industrial sectors. Second, we derived a single-region input–output model for open economies based on the industrial sectors’ diversity and carbon dioxide emissions, and performed an empirical test. We estimated the net carbon intensity embodied in export, which is 0.237tCO2/ten thousand RMB, to divide all sectors (ACSs) into high-carbon sectors (HCSs) and low-carbon sectors (LCSs). The results show that higher trade openness leads to a reduction in the intensity of CO2 emissions and gross emissions and that there are obvious structural differences in different sectors with different carbon emission intensity. The coefficient of trade openness for LCSs is −0.073 and is statistically significant at the 1% level, so higher trade openness for LCSs leads to a reduction in the CO2 emissions intensity. However, the coefficient for HCSs is 0.117 and is statistically significant at the 10% level, indicating that higher trade openness increases the CO2 emissions’ intensity for HCSs. The difference is that higher trade openness in LCSs can help reduce the CO2 emissions’ intensity without the problem of carbon leakage and with the existence of the environmental Kuznets curve (EKC), whereas there is no EKC for HCSs and carbon leakage may happen. We introduced dummy variables and found that a “pollution haven” effect exists in HCSs. The test results in HCSs and LCSs are exactly the opposite of each other, which shows that the carbon leakage of ACSs cannot be determined. The message that can be drawn for policy makers is that China does not need to worry about the adverse impact on the environment of trade opening up and should, in fact, increase the opening up of trade, while becoming acclimatized to environmental regulation of a new trade mode and new standards. This will help amplify the favorable impact of trade opening up on the environment and improve China’s international reputation. The policies related to trade should encourage structural adjustment between the sectors via the formulation of differential policies and impose a restraint on sectors that have high levels of CO2 emissions embodied in export.
Highlights
Paris conference on climate change in December global climate governance TheTheParis conference on climate change in December set set up up the the global climate governance mechanism from restatedthat thatit itwould would peak carbon dioxide emissions mechanism from2020toto2030, 2030,and and China restated peak carbon dioxide emissions around around The China–USJoint Announcement on ClimateChange was released in November on Climate 2014
The difference is that higher trade openness in low-carbon sectors (LCSs) can help reduce the CO2 emissions’ intensity without the problem of carbon leakage and with the existence of the environmental Kuznets curve (EKC), whereas there is no EKC for high-carbon sectors (HCSs) and carbon leakage may happen
Most Member States (MSs) recorded a reduction in CO2 emissions when comparing the Baseline case to the Reference case, and the results show that carbon leakage is very small and in some cases negative, due to technological spillover effects
Summary
2020toto2030, 2030,and and China restated peak carbon dioxide emissions around around. 2 emissions government has announced it efforts will make efforts reach this peak sooner. 2 emissions perby unit of GDP by 2020 to as 2005. This was relative goal with upper limit imposed. Opening up of foreign trade is very to cause trade very likely to cause sectors the transfer of polluting sectors and leakage (Figure 1). This fact on theistransfer of polluting and carbon leakage This fact has considerable bearing haspolicy-making considerable bearing policy-making related to trade openness and achieving the related toontrade openness and achieving the CO emissions reduction commitment emissions reduction theeconomic context ofnormality, the new Chinese economic normality, and it under the contextcommitment of the new under.
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