As much as one-third of Chinese air pollution is related to goods that are exported from China, and some of that pollution blows across the Pacific. We find that, while outsourcing of manufacturing from the US to China has probably improved air quality in the eastern U.S. (where such manufacturing was previously located), it therefore worsens air quality in the western US.
Increasingly, the goods and services consumed in one country depend upon fossil carbon extracted or burned in other countries. This undermines climate policies adopted by one nation because such policies do not regulate emissions that occur elsewhere. Meanwhile, nations that depend on imports of fuels or emissions-intensive goods are exposed to the costs of climate policies that may be adopted in nations that export these things.
Just as rich nations outsource their CO2 emissions to China, rich coastal provinces in China are outsourcing emissions to the poorer provinces in the interior of that country. China's province-specific emissions targets will only further encourage this dynamic, despite the fact that the cheapest and easiest emissions reductions--the low-hanging fruit--are in those less developed interior provinces where the energy technologies in use are unsophisticated and inefficient.