Pollution haven or pollution halo? The role of global value chains in Belt and Road economies

• Published date: 01 February 2024
• Author: Muhammad Uzair Ali,Ying Wang
• Date: 01 February 2024
• DOI: http://doi.org/10.1111/rode.13041

REGULAR ARTICLE

Pollution haven or pollution halo? The role of

global value chains in Belt and Road economies

Muhammad Uzair Ali|Ying Wang

College of Economics and Management,

Nanjing University of Aeronautics and

Astronautics, Nanjing, People's Republic

of China

Correspondence

Muhammad Uzair Ali, College of

Economics and Management, Nanjing

University of Aeronautics and

Astronautics, Nanjing, People's Republic

of China.

Email: uzairali@nuaa.edu.cn

Abstract

“Global value chains”(GVCs) participation brings countle ss

economic and environmental benefits to “Belt and

Road Initiative”(BRI) economies. As the nations asso-

ciated with BRI are crucial members of GVCs, ana-

lyzing the influence of GVCs on environmental quality

in BRI economies is of great significance. By joining

regression models with “multi-region input–output”

analyses, current study inspects the influence of GVCs

on environmental quality in 82 BRI economies from

2002 to 2018. This study considered different GVCs par-

ticipation modes and national heterogeneity to check

“pollution haven hypothesis and pollution halo

hypothesis”theories. The GVC position worsened

environmental quality in the full BRI panel and vali-

dated the pollution haven hypothesis theory. Forward

and backward participation improves environmental

quality and confirms the pollution halo hypothesis.

Moreover, income-specific outcomes showed diver-

gent patterns related to GVCs and environmental

quality. GVCs' position of GVCs promotes the en-

vironmental quality of developed and emerging

countries and exacerbates that of developing and

underdeveloped economies. Moreover, the links of

forward and backward participation with environ-

mental quality showed mixed results for the pollution

haven and halo theories in all subpanels. The results

propose that the BRI should focus on upgrading GVCs

Muhammad Uzair Ali contributed this work and should be considered as the first author.

Received: 27 March 2023Revised: 25 July 2023Accepted: 27 July 2023

DOI: 10.1111/rode.13041

168 © 2023 John Wiley & Sons Ltd.Rev Dev Econ. 2024;28:168–189.wileyonlinelibrary.com/journal/rode

and adopting region-specific green policies to ensure a

sustainable environment.

KEYWORDS

Belt and Road initiative, environmental quality, global value

chains, pollution halo & haven theories

JEL CLASSIFICATION

F02, F18, Q56

1|INTRODUCTION

The “Belt and Road Initiative”(BRI), the first multi-regional cooperation framework primarily

comprised of developing nations, deeply integrates GVCs (Ali & Wang, 2023; Lisha &

Mengying, 2022). GVCs are trade and production networks that include multiple corporations

and countries. Countries occupying the upper end of GVCs have comparative advantages in

advanced technology and clean production. Countries with highly carbon-intensive industries

are positioned at the lower stream of GVCs. BRI economies are crucial GVCs participants, as

according to the “Asian Development Bank multi-region input-output database”and the

“World input-output database,”the participation of several BRI economies in GVCs is more

than the global average (Fang et al., 2020). However, most BRI countries are positioned in the

lower stream of global value chains, and their production requires extraordinary energy use

and produces massive emissions and waste (Han et al., 2020; Qian et al., 2022). In BRI econo-

mies, greenhouse gas emissions and energy consumption increased by 46.3% and 41%, respec-

tively, from 2006 to 2016 (IEA, 2020), accounting for 29%–50% of “global greenhouse gas

emissions”(Chen et al., 2020). Consequently, as a vital source of global environmental waste

emissions (Fan et al., 2019), studying the influence of GVCs on environmental quality (EQ) in

BRI economies can contribute substantially to global environmental quality governance.

Furthermore, the adverse climate change caused by increasing activities related to GVCs,

international trade, industrial production, and human consumption intensifies society's vulner-

ability and increases the inefficiency of available ecological footprints (Khan, Hou, Le, &

Ali, 2021; Khan, Hou, & Le, 2021; Shi et al., 2022). The “ecological footprint”calculates the

shrinking rate of the forest, grazing land properties, public water resources, and the growth of

carbon dioxide discharges. Under the United Nations' SDGs, Kyoto Protocol, and Paris Climate

Agreement, failure to attain sustainable production and GHG emission reduction goals will lead

to massive ecological shortages (Ahmad et al., 2020). The “ecological footprint”calculates the

supply and demand of available natural resources. The supply portion of the “ecological foot-

print”indicates the biocapacity and production level, and the demand side calculates the bio-

logical resources that residents require to manufacture the assets and expel waste,

particularly GHG emissions (GFN, 2020). Thus, if the ecological footprint exceeds biocapacity,

ecological shortages occur. This shortage illustrates that the demand for natural resources to

develop products and services has exceeded what can be delivered and what an ecological

environment can re-establish. In contrast, if the ecological footprint exceeds or equals bio-

capacity, ecological footprint reserves prevail (Kongbuamai et al., 2021). Consequently, eco-

logical footprint, a collective instrument, can be used as an indicator of environmental quality

ALI and WANG169