Theory and intuition tell us that the imposition of stringent environmental policies by a given country will reduce its net exports of commodities produced using pollution-intensive industries. It is therefore surprising that many empirical studies of international commodity trade have failed to find evidence of this effect. This study offers a new, highly focused test of the pollution haven hypothesis, by investigating the link between international factor trade in coal and urban air concentrations of SO2. I find statistically significant evidence that countries with poor air quality do have higher net factor exports of coal; however, the magnitude of the impact is small, casting doubt on the economic significance of the pollution haven effect as a guide to policy.
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Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2006 Annual meeting, July 23-26, Long Beach, CA with number
21191.
Length: Date of creation: 2006 Date of revision: Handle: RePEc:ags:aaea06:21191
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