Trade Cooperation, Environmental Protection, and Sustainability: The Belt and Road Initiative Perspective

Trade cooperation is crucial for socioeconomic development and environmental sustainability. Countries connected by the Belt and Road Initiative (BRI) account for 54% of the world's primary energy supply, and most countries along the Belt and Road (B&R) region are developing economies, typically facing the dilemma of economic growth and environmental protection. Based on the global multi-regional dynamic computable general equilibrium model (C³IAM3.0/GEEPA), this study systematically simulates the impact of trade cooperation in the B&R region on the distribution of economic and environmental effects from a global economy-wide perspective. Results show that trade liberalization fosters trade growth and enhances residents' welfare. However, it is also found that foreign direct investment has positive effects on economic growth in the mid-and-long term but also exacerbates environmental losses. Finally, the effectiveness of a customized carbon reduction policy is verified in this study, providing an opportunity to achieve the balance between trade cooperation and environmental protection, inspiring governments to develop a more desirable combination of policies, instead of treating economic growth and environmental protection as mutually exclusive.