The paper trade openness and pollution in China: processing versus ordinary trade, co-auhtored by José de Sousa, Laura Hering and Sandra Poncet, has been presented at the ERE Seminar UC Berkeley (Sept. 30, 2015), and the PSE RUE Seminar (Oct. 5, 2015).
Abstract: What is the effect of international trade on China’s environment? Does it depend on different trade regimes? Our theory highlights a differential environmental impact of processing versus ordinary trade, which is supported by the data. We exploit a panel dataset covering 235 Chinese cities from 2003 to 2012 for which we observe trade openness and SO2 emissions. We take specific account of the endogeneity of trade and find that processing trade tend to reduce local SO2 emissions. In contrast, the environmental gains from ordinary trade appear much lower. This result suggests some caution regarding pollution prospects in the context of the declining role of processing trade.