( Economics and Management School of Wuhan University)

 Abstract: This paper firstly estimates the quantity of CO2 emissions for 30 provinces of China covering the years from 1997 to 2008，then uses the panel data to investigate the relationship between the China's CO2 emissions and trade openness comprehensively and objectively． Based on the different model settings，static and dynamic panel model，we implement different instrumental variable strategies，external instrumental variable，lagged explanatory variable and a combination set of internal instrumental variables in the dynamic model to control the endogeneity of the related variables． The empirical results show that trade openness increases CO2 emissions and carbon intensity of China's provinces，international trade has a negative impact on China's environment，the effect of environmental gains from trade is overwhelmed by the effect of race to the bottom，but China's current trade environmental situation has certain objective reasons． In the long run，the government should strengthen environmental regulation．

Key Words: Trade Openness; Carbon Dioxide Emission; Instrumental Variable