Is Free Trade Good for the Environment?
AbstractThis paper sets out a theory of how openness to international goods markets affects pollution concentrations. We develop a theoretical model to divide trade's impact on pollution into scale, technique, and composition effects and then examine this theory using data on sulfur dioxide concentrations when it alters the composition, and hence the pollution intensity, of national output. Our estimates of the associated technique and scale efforts created by trade imply a net reduction in pollution from these sources. Combining our estimates of scale, composition, and technique efforts yields a somewhat surprising conclusion: freer trade appears to be good for the environment.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6707.
Date of creation: Aug 1998
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Other versions of this item:
- F1 - International Economics - - Trade
- Q00 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - General
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