TRADE AND ENVIRONMENT: DUE IMBALANCE BETWEEN CHINA AND EU

Abstract:

The globalization of trade in goods has numerous environmental implications. Trade causes a geographic separation of consumers and the pollution emitted in production of consumable items. This gives a mechanism for consumers to shift environmental pollution associated with their consumption to other countries.

China is now the world third biggest country in terms of trade in commodities; on the other hand, it is also the world biggest CO2 emitter. As china’s biggest trade partner, EU holds a huge trade deficit against china which has aroused a lot of disputes between the two parties. But so far the related assessments of the causes and consequences of EU-China trade have very little attention being paid to environmental impacts and implications. In fact, behind the trade surplus between China-EU, there is also a huge emission surplus, the CO2 embodied in China-EU trade is even more unbalanced than that of trade. EU avoided a huge amount of CO2 emissions through trade with China. It might be good to the EU government and the consumers, but not for China and the global warming. In this paper, the due imbalance between China and EU, its mechanism, and policy implications will be presented.