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Has processing trade made China's exports cleaner? A regional level analysis

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  • Duan, Yuwan
  • Yan, Bingqian

Abstract

This paper investigates the role of processing trade on China’s regional CO2 emission intensity of exports (EIE). We investigate the temporal changes in regional EIEs and their determinants from 2002 to 2012 by using special multi-regional input-output tables that distinguish the production of processing exports from other production at the regional level. By using structural decomposition analysis, we attribute the regional EIE changes into effects of very detailed components, which show the roles of different production types and factors in EIE changes. We find that EIE increased from 2002 to 2007 but decreased from 2007 to 2012. In this regard, processing exports play a decisive role in the first period, making China's exports dirtier, but help exports be cleaner after the crisis. By factor, the input structure reflected by the inter-industry production linkage is the main reason for the different performances of EIEs in the two periods. The interregional trade in intermediate inputs has increased most inland regions' EIEs while decreasing coastal regions' EIEs.

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  • Duan, Yuwan & Yan, Bingqian, 2021. "Has processing trade made China's exports cleaner? A regional level analysis," Energy Economics, Elsevier, vol. 96(C).
    • Handle: RePEc:eee:eneeco:v:96:y:2021:i:c:s0140988321000554
    DOI: 10.1016/j.eneco.2021.105150
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    More about this item

    Keywords

    Emission intensity; Processing exports; Structural decomposition analysis; Input-output table; CO2 emissions embodied in exports;
    All these keywords.

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • F64 - International Economics - - Economic Impacts of Globalization - - - Environment

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