How does trade openness impact carbon intensity?

This work is aimed to investigate the effect of trade openness on carbon intensity in 104 countries/regions from 2000 to 2014 through a panel threshold model. The results show that trade openness and foreign direct investment have significant asymmetric effects on carbon intensity. With foreign direct investment as the threshold variable, the impact of trade openness on carbon intensity is negatively correlated. In addition, the impact of trade openness on carbon intensity is heterogeneous. In the high income and lower-middle-income groups, trade openness reduces carbon intensity. Unlike the upper middle-income group, trade openness increases carbon intensity. A better understanding of the relationship between trade openness and carbon intensity provides theoretical support for countries to better use foreign trade activities to achieve low-carbon development. (c) 2021 Elsevier Ltd. All rights reserved.

Automated summary

The study found significant asymmetric effects of trade openness and foreign direct investment on carbon intensity, with different income groups showing varying impacts of trade openness. This provides theoretical support for countries to utilize foreign trade activities towards achieving low-carbon development.