Climate Policy Uncertainty and High-Quality Trade Development

Against the backdrop of increasingly severe global environmental problems, countries have introduced a series of policies to address climate change. However, policy uncertainty—encompassing policy formulation, implementation, and potential changes—has created new challenges for export trade. From the perspective of export activity, this paper investigates the effects of climate policy uncertainty on trade development and the underlying mechanisms, and examines how policy design can adjust the potential effects of uncertainty on trade development. Using a climate policy uncertainty index constructed through text analysis and deep learning methods, the paper combines a mathematical model with empirical analysis and finds that rising climate policy uncertainty reduces export scale, with the decline manifested in both the extensive and intensive margins. A range of robustness analyses confirms the reliability of this finding. Heterogeneity analysis shows that the effects of climate policy uncertainty vary across product, regional, and other dimensions. Mechanism analysis indicates that climate policy uncertainty affects regional credit supply and firms' production and investment decisions, and raises the cost of energy use. Further analysis shows that attention to climate policy amplifies the adverse effects of uncertainty, that uncertainty across different types of policies exhibits mutually amplifying effects, and that the promotion of inclusive finance mitigates the negative effects of uncertainty. This paper offers a new perspective on the complex interaction between climate policy and international trade, and its findings provide useful insights for the formulation of China's climate, industrial, and trade policies.