Research On The Effect Of Sino-us Trade On Economic Growth And Carbon Dioxide Emissions

While international trade can promote economic growth, it also has a complicated environmental impact. This paper shows that the growth of global Carbon Dioxide (CO2) emissions is one of the consequences of globalization. More importantly, with the rapid growth of global trade, the environment costs behind the economic benefits are increasingly high.GO2is the primary greenhouse gas (GHG) that is produced by human activities. CO2is also the centerpiece of international climate negotiations. As nations struggle to address climate change, it is important to look at the effect of international trade on country-specific and global CO2emissions and economic growth, in particular the fact that CO2can be leaked from one country to another through international trade.This study firstly constructs a simultaneous equations model of the macroeconomic system to test the economic benefits of Sino-US trade. The results shows that the28years of China’s total export trade from1980to2012and29years of China’s exports to the US during that period had a positive contribution to promote China’s economic growth. The contribution rate of China’s total export, net export, exports to the US and net exports to the US from1980to2012to China’s economic growth was0.86percent,0.57percent,0.29percent and0.14percent, separately. From1985to2011, because of the exports to China, the US real gross domestic product increased by$8,867billion, while because of the exports to the US, China’s real gross domestic product increased by￥229.396billions. The benefits of Sino-US trade on the world’s economic growth reached$38.99billion during the last two decades.This study also estimates the effect of Sino-US trade on national and global CO2emissions in two scenarios, with Sino-US trade and without Sino-US trade. In2002, as a result of producing exports for the US, China emitted an additional CO2of427MMT, compared to only21MMT in US exports. If there were no Sino-US trade, assuming domestic production of imports, in2002China’s CO2emissions associated with these goods would have been238MMT, and the US CO2emissions associated with the imports would have been132.75MMT. With the expansion of Sino-US trade between the periods of2002to2011, the above four parameters of CO2emissions increased. In2011, China produced1473.43MMT additional CO2emissions (about 17%of China’s CO2emissions) resulting from the exports to the US, and embodied in US exports was only82MMT. If China and the US produced the imports domestically instead of importing from each other, CO2emissions associated with these goods in China would have been only845MMT, while the US CO2; emissions would have been higher at308MMT. Therefore, because of Sino-US trade, Chinese net additional CO3emissions increased from188.62MMT to628.11MMT between2002and2011, while the US net avoided CO2emissions increased from110.54MMT to226.15MMT between2002and2011. These results show that Sino-US trade increased additional global CO2emissions by3464.78MMT during2002to2011. These findings suggest that international trade not only changes the pattern of global CO2emissions, but also increases global CO2emissions. China’s large trade surpluses, low carbon productivity and high CO2intensity of export product mix led China to become the world’s biggest CO2emitter.The fact behind the globalization is that the economic benefits have come at the expense of the environment sacrifice. The global ration of economic benefits to carbon emissions decreased from0.279in2002to0.083in2011; China’s ration of economic benefits to carbon emissions decreased from0.087in2002to0.044in2011;The US ration of economic benefits to carbon emissions decreased from0.048in2002to0.025in2011。The growth of trade has brought China great economic benefits, but has come at the expense of the environment sacrifice. China’s economy development model and trade model is unsustainable and thus needed to be changed. China should consider seriously that how to balance the economic growth and environmental protection, and how to transit to a sustainable growth model in the near future. As policy recommendations, transforming the export commodity structure, enhancing China’s energy efficiency and optimizing energy structure are examples of ways to balance economic growth and environmental protection in China’s future sustainable development.