Trade conflicts destroy the planet

Tariff wars are often justified as necessary to protect or reshore manufacturing jobs and to improve national security.

- Qiyuan Xu

A photo taken on Oct 9 shows a ship at the container terminal of the port in Qingdao, in China's eastern Shandong province.AFP

(AFP)

But, according to new research, these conflicts produce another outcome that is largely overlooked: pollution. When global supply chains are forced into inefficient detours, carbon dioxide emissions rise.

In a recent study of the US-China trade conflict’s environmental effects, my coauthors and I found that tariffs have directly increased global CO2 emissions. Based on our calculations, if both sides were to impose a 60% tariff on imports from the other — a level consistent with the recent escalations in April — this would lead to a onetime increase in global emissions of nearly 410 million tonnes, roughly the same amount produced by 165 million gas-powered cars (with 1.6L engines) each travelling 10,000 kilometres.

This may seem counterintuitive. Given that China is the world’s largest emitter and has a high carbon intensity (CO2 emissions per unit of GDP), some assume that shifting production out of the country would reduce global emissions. But in many manufacturing sectors, China's carbon intensity is significantly lower than that of numerous developing economies, and in certain industries it is even lower than that of some advanced economies. The Chinese economy's high overall carbon intensity simply reflects its heavy reliance on manufacturing — a classic example of Simpson's paradox.