Analysis on Environmental Cost Internalization Effect -- A Study Based on CO2 Emission

In this article, environmental externality and environmental cost internalization are defined, and the related research concerning the relationship between trade and environment is reviewed. With the focus on analysis of the results brought by environmental cost non-internalization and environmental cost internalization, the author proposes that, the trade scale should be enlarged and measures should be taken to internalize environmental cost based on the analysis of the general conditions. Otherwise, the scale effect brought about by trade will aggravate the degree of environmental damage.