In December 2019, a paper entitled "Environmental and Economic Impacts of Trade Barriers: The Example of China – US Trade Friction"  Co-authored by Professor Liang qiaomei, Professor Wei Yi-Ming, Professor Felix Creutzig( German Institute of Technology, Berlin and Mercator Institute for Global Public Climate Change), Dr. Yao Yunfei and Liu Lijing, a doctoral student of the center, was published in Resource and Energy Economics, a well-known journal in the field of international energy economics.

　　Based on the national key R & D project (2016YFA0602600) "Research on the Comprehensive Assessment Model of Economic Impacts of Climate Change" led by Professor Wei Yi-Ming, this study uses a global computable general equilibrium model —C3IAM / GEEPA. Taking the trade tariff policy recently initiated by the Trump’s administration as an example, six rounds of trade frictions between the two major economies of China and the United States at present and the future with the same development trend was simulated. This paper analyzes the social and economic impact, environmental impact and long-term climate impact caused by different tariff barrier policies. The results show that the trade friction between China and the United States has a significant negative impact on the development of global trade, which has caused global GDP to fall by 0.05%. Both China and the United States have significantly reduced greenhouse gases and pollutants, but the environmental emissions of other countries in the world have increased. Power, oil smelting and coking, oil seed and soybean planting, coal mining, other livestock and poultry breeding industries, etc., are key industries that cause changes in greenhouse gas emissions between China and the United States. In addition, the economic losses caused by the China-US trade friction to both sides of the conflict are of a certain duration, and non-participants can benefit indirectly. In the long run, the continuation or escalation of trade frictions will greatly reduce the energy consumption of participants and the world as a whole, but it is not conducive to the clean energy development of the Middle East, Africa and Latin America. The trade friction between China and the United States can lead to long-term decline in total greenhouse gas emissions and overall improvement in air quality, but greenhouse gas and local pollution emissions in other regions will increase. In particular, moderate environmental improvement is far from enough to make a clear response to climate change, and it is challenging to consider economic and environmental benefits at the same time. This distorted trade policy will cause huge economic and welfare losses. Therefore, giving priority to free trade of low-carbon goods and implementing environmental protection policies (such as carbon tax) can be a good policy choice to improve the environment while maintaining the welfare of residents.

　　C3IAM is a comprehensive climate change assessment model in China, which is independently developed by the Center for Energy and Environmental Policy Research of Beijing Institute of Technology. Global Energy and Environmental Policy Analysis Model-GEEPA is the core economic module of the C3IAM model.　　

　　GEEPA is a global multi-region recursive dynamic computable general equilibrium model, which is mainly composed of five basic modules of production, income, expenditure, investment, and international trade. It can not only be used to examine the future global economic growth, Changes in socio-economic factors such as industrial structure, investment consumption, energy consumption, and the introduction of greenhouse gas and pollutant emission modules can be used to measure the impact of economic activities on the environment, including greenhouse gas and local pollutant emissions, radiative forcing, Greenhouse gas concentration, temperature rise, etc.

　　Geepa is a global multi-region recursive dynamic computable general equilibrium model, which is mainly composed of five basic modules: production, income, expenditure, investment and international trade. It can not only be used to investigate the changes of global economic growth, industrial structure, investment consumption, energy consumption and other socio-economic factors under different socio-economic paths (SSPS), but also by introducing greenhouse gases and pollutant emission module, which can be used to measure the impact of economic activities on the environment, including greenhouse gas and local pollutant emissions, radiative forcing, greenhouse gas concentration, temperature rise, etc.

Original link: https://www.sciencedirect.com/science/article/pii/S0928765519301745   

Li-Jing Liu, Felix Creutzig, Yun-Fei Yao, Yi-Ming Wei, Qiao-Mei Liang*, 2020. Environmental and Economic Impacts of Trade Barriers: The example of China–US Trade Friction. Resource and Energy Economics.