Trade openness and air pollution: City-level empirical evidence from China

- We study how trade openness affects air pollution in China.
- We use exogenous geographic determinants and heating policy for identification.
- We use air quality measure from NASA for investigation.
- Trade openness leads to air pollution.

We seek to contribute to the debate over trade openness and the environment by taking specific account of the endogeneity of trade openness. We use exogenous geographic determinants of trade as instrumental variables as well as distance to Huai River for identification which is based on China's heating policy. Using air quality measure from NASA, we find that trade increases three measures of air pollution: SO2, NO2, and Aerosol concentration.