Trade and Sustainability: The Green Dividend of Grain Trade

ABSTRACT This study delves into the potential influence of China's grain trade on carbon emissions from grain production in 169 countries during the period 2001–2020. The investigation utilizes data on grain trade between China and these nations, along with corresponding data on carbon emissions from grain production. The results reveal that China's grain trade contributes, to a certain extent, to the reduction of carbon emissions from grain production in partner countries. This conclusion withstands various robustness tests conducted. Heterogeneity analysis demonstrates that the impact of grain trade in driving the reduction of carbon emissions from grain production is more notable in developing countries. Moreover, soybean trade emerges as particularly advantageous in promoting carbon emission reduction from grain production in these trading partner countries. Mechanism tests conducted to explore further aspects indicate that the establishment of free trade areas (FTAs) plays a crucial moderating role in China's grain trade, fostering carbon emission reduction. This is deemed beneficial for advancing efforts in reducing carbon emissions from grain production. The increased use of fertilizers has intensified carbon emissions in the grain production and distribution process. The findings not only offer fresh insights into understanding China's role in global grain trade and its impact on carbon emissions from global grain production but also provide strategic considerations for global grain security governance, international collaboration addressing climate change, and avenues for accessing green dividends.