›› 2016, Vol. 28 ›› Issue (3): 3-11.

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An Effect of Foreign Trade on the Industrial CO2 Emissions in China

Xu Yuan, Gu Haiying, Zhu Xi   

  1. Antai College of Economics and Management, Shanghai Jiaotong University, Shanghai 200030
  • Received:2014-01-17 Online:2016-03-28 Published:2016-03-31

Abstract:

Taking full account of the endogeneity of trade and using exogenous geographic characteristics, this paper constructs an appropriate instrumental variable for foreign trade of Chinese industries and estimates of the effect of foreign trade of Chinese industries in 1996-2007 on CO2 emissions, for a given level of economy. We find that trade openness significantly decreases CO2 emissions of Chinese industries and gains-from-trade hypothesis is proved in China. Therefore, in the context of climate change, China needs not to blindly limit foreign trade for reducing CO2 emissions.

Key words: foreign trade, Chinese industry, CO2 emissions, instrumental variable