GEP Research Paper 09/19
On The Pollution Content of China’s Trade: Clearing the Air?
Chris Milner and Fangya Xu
Summary
This study compares alternative measures of the pollution content of China’s trade. We find that China’s exports on average embody less pollution content than its imports would if they were produced locally. However, we find that China is a net exporter of embodied pollutants in terms of the actual production of exports and imports.
Abstract
This study compares alternative measures of the potential and actual pollution content of China’s trade using an environmental I-O methodology. Using the conventional, potential measure adopted by other researchers, we find that China ‘saves’ on local environmental resources by exporting goods that on average embody less pollution content than imports would if they were produced locally in China. A less positive, assessment of the environmental impact of China’s trade emerges, however, if the assumption of a common technology for producing exports and imports is dropped. Using an actual pollution content methodology for measuring the pollutants embodied in the production of both exports and imports, we find that China is actually a net exporter of embodied pollutants.
Issued in September 2009
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