Could environmental regulations improve the quality of export products? Evidence from China's implementation of pollutant discharge fee.

This study investigates the effect of Chinese environmental regulations on the quality of export products. As the main way for the government to protect the environment, environmental regulations have greatly influenced the production behavior of enterprises. Based on the data of China's pollutant discharge fee implementation and industrial enterprise-pollution panel data, we find that the government's environmental regulations have significantly improved the quality of export products, and this conclusion is still valid after a series of robustness tests. Further analysis shows that the increase in the quality of export products originating from the regulated areas could be attributed to promoting enterprise innovation and reducing resource misallocation. The results in this study provide evidence that the Chinese government could coordinate economic and environmental protection in the new era.

Environmental regulation benefits for whom? Heterogeneous effects of the intensity of the environmental regulation on employment in China.

As environmental pollution in China has deteriorated in the recent years, intensifying environmental regulation has become a necessity for the Chinese government. But the debate persists among the academic circles and the government over whether a double dividend, reducing pollution emission and boosting employment, of environmental regulations exists. This study differentiates, based on Cobb-Douglas production function, the variance between high- and low-skilled labour and constructs theoretical models to analyse heterogeneous effects of environmental regulation intensity on the employment of labour with varied skills. The model finds that implementing environmental regulation will generate 'compliance cost effect' and 'innovation offset effect'. The compliance cost effect will promote the employment of high-skilled labour while suppressing that of the low-skilled labour. The innovation offset effect, however, will facilitate the employment for both high-skilled and low-skilled labour. Therefore, the employment of high-skilled labour will grow along with the intensification of environmental regulation while that of the low-skilled labour will decline first and then rebound, showcasing a U-shaped curve. The empirical research results based on the provincial dynamic panel data from 2004 to 2018 in China confirm the theoretical analysis. Moreover, we find spatial spillover effects of environmental regulation on employment, with high-skilled labour being more sensitive to changes in environmental regulation. One percentage point increase in environmental regulation in neighbouring regions will cause 0.072% employment decline in high-skilled labour while that of low-skilled labour will only decrease 0.033%. The conclusions of this study verify that dividend in employment growth for both high-skilled and low-skilled labour can be realised along with intensification of environmental regulation, which carries significant guiding implications for policy-making for environmental regulation in China.

Real economic benefits and environmental costs accounting of China-US trade.

A critical reason for China-United States trade friction is that China has a huge trade balance, especially the trade balance of goods. However, this huge trade balance is based on the results of official statistics and does not reflect the real economic benefits and environmental costs embodied in China-US trade, where both refer to trade in value-added and embodied CO2 emission costs, respectively. This paper calculates the trade in value-added and carbon emission transfer between China and the United States based on the World Input-Output Database. Results demonstrate that: (1) Gross trade statistics seriously overestimate China's benefits in China-US trade. The China-US trade surplus, based on gross trade statistics, is 20% higher than when based on trade in value-added accounting. (2) In China-US bilateral trade, China mainly adopts the trade model of importing intermediate products and exporting final products，whereas the United States mainly adopts the trade model of importing final products and exporting intermediate products. China's exports to the United States contain many of value-added in Korea, Taiwan, and Japan. (3) From 2000 through 2014, China maintained a large surplus of CO2 emissions exports to the United States, and China paid a huge environmental cost in its trade with the United States. (4) In China-US trade, China's environmental costs per unit value-added is 3.02 times that of the United States.