Dingel (who’s been blogging a lot lately – finals must be over, and I’m not complaining) points to a report at Vox EU in which Judith Dean and Mary Lovely argue that increased trade throughout the last decade can’t be blamed for China’s pollution. Sort of: 

… as China’s trade has grown, the pollution intensity of almost all sectors has fallen in terms of water pollution (measured by chemical oxygen demand (COD)) and air pollution (measured by SO2, smoke or dust) in 2004…

… Moreover, both Chinese exports and imports are becoming cleaner over time. Part of this trend reflects changes in the composition of the trade bundle, as noted above. However, our evidence suggests that most of the fall in the pollution content of China’s trade is due to changes in industrial pollution intensities (how China produces), rather than in trade patterns (what China exports and imports)… 

Finally… We find strong evidence that Chinese processing exports are cleaner than Chinese ordinary exports. Statistical testing suggests that processing trade has played a key role in explaining the drop in the pollution intensity of Chinese exports over time and that FDI inflows have contributed significantly to this decline, even controlling for the processing trade share.

It would be pretty easy to fall prey to the opposite conclusion, since trade has increased throughout a period of rapid growth in China. One might even say that there is bilateral causality – but let’s not be too bold with our jargon.

With this in mind, more activity means more pollution, even if those activities are less polluting on average. On the plus side, it has helped lift millions (safe to say “billion” yet?) out of poverty. That seems like a good trade; others will disagree.