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Trade openness and environment: a panel data analysis for 88 selected BRI countries.

Muhammad Salam1, Yingzhi Xu2

  • 1School of Economics and Management, Southeast University, Jingguan Building, Dongnandaxue Road 2, Jiangning District, Nanjing, 211189, China.

Environmental Science and Pollution Research International
|November 20, 2021
PubMed
Summary

Trade openness between China and Belt and Road Initiative (BRI) countries reduces CO2 emissions. However, trade among BRI countries has no significant effect on emissions, particularly in low-income nations where it increases CO2.

Keywords:
Belt and road initiativeCO2 emissionsEnvironmentEnvironmental Kuznet curveExportsImportsTrade openness

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Area of Science:

  • Environmental Science
  • Economics
  • International Relations

Background:

  • The Belt and Road Initiative (BRI) launched in 2013 has prompted environmental concerns regarding international trade.
  • Understanding the environmental implications of BRI trade is crucial for sustainable development.

Purpose of the Study:

  • To analyze the environmental impact of trade openness between China and BRI countries.
  • To assess the environmental impact of trade openness among BRI countries.
  • To investigate the effects of BRI countries' exports to and imports from China on CO2 emissions.

Main Methods:

  • Utilized a two-step system Generalized Method of Moments (GMM) model.
  • Employed a panel dataset covering 88 BRI countries from 2001 to 2018.
  • Conducted analysis on the whole sample and subsamples (low-income and high-income BRI countries).

Main Results:

  • Trade openness between China and BRI countries significantly reduces CO2 emissions for the overall sample.
  • Trade openness among BRI countries shows no significant effect on CO2 emissions globally.
  • BRI countries' imports from China significantly decrease CO2 emissions, while exports to China have no significant impact.
  • Trade openness among BRI countries significantly increases CO2 emissions in low-income countries.

Conclusions:

  • Trade linkages with China can offer environmental benefits for BRI countries, primarily through imports.
  • Intra-BRI trade may pose environmental risks, especially for lower-income economies.
  • Policy interventions are needed to mitigate the potential negative environmental consequences of trade within the BRI framework.