Chapter 4 discusses the theoretical logic through which green trade barriers impact pollution emissions of Chinese firms, building on the theoretical framework developed by Grossman and Krueger (1991), Copeland and Taylor (1994), and later research. It identifies three primary channels: the scale effect, technique effect, and resource reallocation effect. Green trade barriers pressure firms to adopt cleaner technologies, thus reducing emissions by inducing technological upgrades and altering industry structures. These barriers also force firms to adjust their production scale, potentially reducing pollution, and drive innovation in sustainable practices. Furthermore, the paper suggests that these barriers promote structural changes in supply chains, pushing for industry-wide green transformations. It also highlights that the effect of green trade barriers varies based on firm characteristics like ownership, trade mode, and pollution intensity. The hypotheses argue that green trade barriers significantly influence firms' green transformations, emission reductions, and technological advancements, especially in pollution-intensive sectors and less regulated regions.