Towards Cleaner Production Ecosystem: An Analysis of Embodied Industrial Pollution in International Trade of China’s Processing versus Normal Exports

Yuting Dang, Yating Song, Muhammad Mohiuddin () and Dan Sheng
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Yuting Dang: School of Management, Tianjin University of Technology, Tianjin 300084, China
Yating Song: School of Management, Tianjin University of Technology, Tianjin 300084, China
Muhammad Mohiuddin: Faculty of Business Administration, Laval University, Quebec, QC G1S2K7, Canada
Dan Sheng: School of Economics, Nankai University, Tianjin 300071, China

IJERPH, 2022, vol. 19, issue 16, 1-21

Abstract: While promoting economic growth, industrial development is causing serious environmental problems and threatening human health. Studies on pollution transfer through international trade often over-estimate the actual embodied emissions in exports and ignore the industrial pollutants. By designing a non-competitive input-output model which differentiates between processing exports and normal exports, we calculate the embodied domestic and imported industrial emissions in China’s processing and normal exports and imports. We also calculate the balance of embodied emission in trade ( BEET ) and the pollution terms of trade ( PTT ), as well as the decomposition of scale, structural, and technical effects on embodied emission in international trade. The results demonstrate that processing exports reduce domestic pollution by importing intermediate inputs; normal exports, on the other hand, have a considerable impact on domestic pollution. Bilateral trade between China and the US has the most detrimental impact on China’s local environment, followed by trade between China and Japan. China’s exports to Japan are more polluting per unit than those to the US and Germany. Technological upgradations and transformation of trade structure have helped to reduce the negative environmental consequences of China-US and China-Japan bilateral trade. Investment in technology and trade policy can lead to a cleaner production ecosystem.

Keywords: non-competitive input-output table; processing trade; embodied domestic emission in exports; the balance of embodied emission in trade; pollution terms of trade; pollution haven hypothesis (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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