The effect of China’s environmental policy on its trade pattern and carbon neutrality
摘要
China has been world’s major exporter as well as major emitter of CO2. In fact, its total exports account for a significant portion of its total CO2 emissions. Despite being the world’s largest CO2 emitter, China is making efforts to reduce its CO2 emissions. China recently expressed its commitment to achieve carbon neutrality by 2060. One of the paths for China to achieve carbon neutrality is to promote a sustainable trade model that focuses primarily on the exchange of environmentally friendly goods. In this regard, China can pursue a strict environmental policy to regulate its trade patterns for major industrial goods that are important to the environment, such as polluting goods, clean goods, and environmental goods. As China's trade with the Belt and Road Initiative (BRI) countries is increasing, the current study investigates the impact of China's environmental policy stringency (EPS) on its trade pattern with a sample of 88 BRI countries from the year 2001 to 2022. This study follows a proper research methodology based on the Gravity Model of trade with a comprehensive estimation strategy that includes pre-estimation analysis, cointegration analysis, and robustness analysis. With the results obtained with the PPML regression model, it is found that although China's EPS significantly increases its trade with BRI countries in all three major categories of industrial goods, trade in environmental goods has received relatively more encouragement. In fact, China's EPS may support China's commitment to carbon neutrality in the future.