The Impacts Of Carbon Tariff On China Industrial Product Export

With the rapid development of economic globalization, climate environment has beenseriously changed by global warming. Excessive carbon emissions cause widespread concernin the international society. It is becoming a focus of the international society to controlcarbon emissions and to alleviate climate warming. In cutting carbon emissions, the KyotoProtocol suggests that developed and developing countries should have the common butdifferentiated responsibilities. The task of reducing carbon emissions should be undertaken bydeveloped countries, rather than the developing countries. Meanwhile, developed countriesshould help developing countries reduce their carbon emissions.The carbon emissions reduction measures will increase the production cost ofenergy-intensive products and reduce competitiveness in developed countries. In order toreduce the production cost, some developed countries shifted energy-intensive products todeveloping countries. This cross-border shifting of pollution industries led to thereconfiguration of productive elements in the global scope, and increases carbon emissions ofdeveloping countries. Therefore, developing countries become the refuge of developedcountries keeping away from environmental pollution, and then carbon leakage occurred. Forthese reasons, the Kyoto Protocol agreement is not satisfactory to reduce greenhouse gasemissions. So, in recent years, developed countries focus on trade and environment policyresearch of carbon leakage and industrial competitiveness. They require developing countriesincluding China to bear the carbon emissions reduction obligations.Carbon tariff is a levy of carbon emissions imported by developed countries onenergy-intensive products. It is becoming an excuse for carbon tariff policy proposed by theUS to protect the global climate environment and to prevent carbon leakage. They emphasizethat the carbon tariff of energy-intensive products can reduce or avoid carbon leakage, andsolve the problems of the global climate change. In essence, developed countries want to limitthe export of energy-intensive products of developing countries through border carbonadjustments, and protect the international competitiveness of their energy-intensive products.At present, China is the largest exporter and carbon emitter in the world. If carbon tariffis implemented, developing countries including China will be forced to reduce the carbonemissions. The export of energy-intensive products of China will face serious challenges, including mainly as follows: decreasing the competitive advantage on the low cost, damagingprofits of export enterprises, increasing trade frictions, reducing the export markets and theexport trade, and thus hinder the process of China’s industrialization and inhibit the rapideconomic growth of China.With respect to carbon leakage and competitiveness, most of the researches analyzed theeffect of carbon tariff on the economic benefits of developed countries, but the conclusionsare different. Based on the economic growth of developing countries, there are furtherresearch space in the analysis of the risks and opportunities brought by carbon tariff. Throughthe analysis of the related literatures, the research between carbon tariff and internationaltrade was found to be still insufficient; especially the study on the relationship betweencarbon tariff and industrial product export of China is very limited.Nowadays, on the background of deteriorated global climate environment, for dealingwith carbon tariff proposed by developed countries and promoting the stable development ofChina export, there are some important theoretical and practical meanings in the followingaspects: how to develop economy under the climate change environment, how to use tradepolicy to protect climate environment, what are the relationships between environmentalpolicy and trade policy? What will happen if carbon tariff is implemented? Therefore, theaims of this study are to analyze the effect of carbon emissions and carbon tariff on China’sindustrial product export, and provide theoretical and practical support for China industrialproduct export to deal with carbon tariff. Countermeasures are suggested to actively respondto carbon tariffs from different angles and levels. The main conclusions of this study are asfollowing:1. According to present researches of carbon emissions and relevant theories, the theorieshad been sorted out based on externality theory, factor endowment theory, and trade theory.Through exploring the linkage between environment and trade theories, the theoretical andempirical analysis had been provided for development of China industrial products export.2. The paper analyzes the various traits of carbon tariff. Economic partial and generalequilibrium theory is used to analyze transmission mechanism of carbon tariff. The resultssuggest that carbon tariff will have negative impact on developing country’s export. At thesame time, the political and economical interest confliction behind carbon tariff is analyzed.3. From reality perspective, the paper analyzes degree of dependence on foreign tradeand carbon emission problems of China industrial product export. Since China is the largest exporter and largest carbon emitter in the world, the producing process of export productsincrease China’s carbon emissions.4. By using econometric VAR model, it is completed to analyze empirically the long-runequilibrium relationship between carbon tariff and China industrial product export during1991~2011. The empirical study shows that China industrial product export has a strongrelation with carbon tariff. In short-term, carbon tariff has severe negative impact on Chinaindustrial product export. In long-term, the negative influence of carbon tariff will increaseslowly. The result indicates that export will change with carbon tariff; the elasticity is3.69,namely carbon tariff increase by1%, while exports reduce by3.69%.5. The successful experience of low carbon export in developed countries is analyzed. Itis completed to take the comparative analysis between different developed countries, and toprovide a reference for the low carbon development of China industrial products export. Lowcarbon development strategy of export in developed countries will change the growthdirection of the world economy, and have an important impact on the world economic pattern.6. SWOT analysis is completed on the industrial product export of China under thebackground of carbon tariff. Results suggest that in the short term, carbon tariff will slowdomestic economic growth and weaken the international trade competitive advantage ofChina. However, in the long run, carbon tariff will be the drivers to promote thetransformation of China’s economic growth pattern. Under the background of climate change,it is a trend to develop China’s low-carbon economy. The paper puts forward some concretestrategies responding to carbon tariff in terms of environmental diplomacy, governmentbehavior, enterprise behavior, and export structure.