Using Modified Anti-Dumping Mechanisms for Sustainable Development: The Case of the Chinese Iron and Steel Industry

The impact of the Chinese iron and steel industry (CISI) on the environment demonstrates that the combination of production overcapacity and high emissions production methods present a serious threat to its own sustainability. Despite efforts by the Chinese government through the 13th Five Year Plan (2016-2020) to put its industries on track with sustainable development, industrialists have found ways to elude regulation and their provincial governments have been willingly ignoring such transgressions in the name of regional prosperity. The firms in this industry eventually became large enough to operate autonomously from the central government, sustaining themselves through assistance from provincial governments and direct trade with foreign markets. This report examines the viability of using external measures to realign the CISI and industries of similar characteristics with sustainability. While anti-dumping measures (ADMs) as an external regulatory mechanism are certain to have an impact on CISI, their conventional application remains insufficient. Thus, the modification proposed in this report targets both material injuries to importing economies’ industries and irresponsible production methods that cut costs by means of egregious environmental degradation. As such, this paper provides the basis for a modified approach to ADMs entitled the “tCO2e/t-s Adjusted Dumping Margin” or simply the “Carbon-adjusted Dumping Margin (Carbon-adjusted DM).”