This paper examines how free international trade affects the environment in the developed and less developed worlds. Using input-output techniques, tests of the pollution haven hypothesis (PHH) and the factor endowment hypothesis (FEH) for the US and China were empirically carried out. We found that China gains and the US lose in terms of CO2, SO2 and NOx emissions from increased trade, and the US is not exporting capital intensive goods. Thus both the PHH and the FEH are rejected, which implies that explaining the trade of pollutants remains an unresolved puzzle.
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Paper provided by The Center for Economic Research and Graduate Education - Economic Institute, Prague in its series CERGE-EI Working Papers with number
wp292.
Find related papers by JEL classification: F18 - International Economics - - Trade - - - Trade and Environment Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
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