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Environmental impacts of international trade: The Case of Industrial Emission of Sulfur Dioxide (SO2) in Chinese provinces

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  • Jie He

    () (GREDI, Département d'économique, Université de Sherbrooke)

Abstract

To get better understanding on trade’s impact on environment, we construct a four-equation simultaneous system, in which emission is determined by the three economic determinants: scale, composition and technical effects and directly by trade. Supposing the three economic determinants are also endogenous to trade, we check in the following three functions the indirect impacts of trade on environment through the intermediation of the three effects. The model is then estimated by 29 Chinese provinces’ panel data on industrial SO2 emission (1993-2001). Our estimation results reveal totally opposite role of export expansion and accumulation of manufactured goods import in industrial SO2 emission determination. The results do not support “pollution haven” hypothesis; the reinforced competition faced by exporters is a positive factor encouraging technology progress in pollution abatement. China’s actual comparative advantage resides in labor-intensive industries, exporting to world market actually helps to reduce pollution increasing caused by its heavy-industry-oriented industrialization strategy, which is traditionally supported by government-intervened import activities.

Suggested Citation

  • Jie He, 2007. "Environmental impacts of international trade: The Case of Industrial Emission of Sulfur Dioxide (SO2) in Chinese provinces," Cahiers de recherche 07-02, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
  • Handle: RePEc:shr:wpaper:07-02
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    File URL: http://gredi.recherche.usherbrooke.ca/wpapers/GREDI-0702.pdf
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    Keywords

    : international trade; industrial SO2 emission; simultaneous system; scale effect; composition effect; income effect; Hypothesis of “Porter” and “Racing to the bottom”; China.;

    JEL classification:

    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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