Trade of eco-friendly products and CO2 emissions in China: A spatial spillover analysis within the EKC framework

Given the urgent need to tackle China's low-carbon transition and green economy challenges, this paper examines the relationship between the trade of eco-friendly products (green trade) and carbon dioxide emissions in China from 2010 to 2022 within the framework of the Environmental Kuznets Curve. Using a Spatio-Temporal Durbin Model across 28 mainland Chinese provinces, the study investigates both the direct and spatial spillover effects of green trade on carbon emissions. The results confirm that while green trade effectively reduces local emissions, it also generates pollution diffusion effects (CO₂, SO₂), increasing emissions in neighboring regions. Additionally, carbon emissions exhibit a positive spatial spillover effect, indicating a concentration of emissions across regions. The analysis suggests that China is still on the upward trajectory of the Environmental Kuznets Curve for carbon emissions, with economic expansion driving emissions further. This study provides specific policy recommendations for enhancing green trade and mitigating cross-regional pollution spillovers, including promoting cleaner technology imports, strengthening inter-regional policy coordination and incentivizing low-carbon industry transitions.