In 2017, China surprisingly announced that it would ban the import of several types of waste, which implied that after 2017 a large amount of waste had to be redistributed between other countries. This study uses the shock of the sudden import ban to study and disentangle the main reasons for waste trade.
Access to data allows us to study how firms that had been exporting any of the wastes to China have reacted to the policy. These firms might have either made use of more domestic waste handling or diverted their waste exports to other countries. We study if firms started to divert their exports to countries with lower environmental standards, thus leading to an outsourcing of the environmental consequences associated with waste handling, or if the waste went to industrializaing economies that could recycle the waste.