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Does Trade Lead to a Race to the Bottom in Environmental Standards? Another Look at the Issues

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Author Info

  • Medalla, Erlinda M.
  • Lazaro, Dorothea C.

Abstract

With rising globalization and advances in technology, the interrelationship between trade and the environment has increasingly become a pressing issue across the globe. This paper seeks to contribute to the discussion, mainly by looking at some theoretical underpinnings, learning from some findings in the literature and offering additional empirical evidence in relation to what is happening in the globalized world. For example, is there evidence that international trade encourages a "race to the bottom" in environmental regulations? Are developing countries more likely to export polluting products? On the other hand, are calls for environmental protection no more than disguised protectionism? What is the state of the global/multilateral regime dealing with trade and environment? Accordingly, the paper looks at some theoretical underpinnings and findings on trade and environment linkage. This is followed by a discussion on the current trade structure of products by pollution-intensity classification between developed and developing countries. The paper also contains two sections dealing respectively with some observations on environmental regulations and the treatment of environment in the multilateral agenda. Finally, the paper concludes by highlighting the need to pursue trade and environment policies in tandem.

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Bibliographic Info

Paper provided by Philippine Institute for Development Studies in its series Discussion Papers with number DP 2005-23.

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Length: 33
Date of creation: 2005
Date of revision:
Handle: RePEc:phd:dpaper:dp_2005-23

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Related research

Keywords: trade and environment linkages; race-to-the-bottom; pollution haven; Kyoto Protocol;

References

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  1. Josh Ederington & Arik Levinson & Jenny Minier, 2004. "Trade Liberalization and Pollution Havens," NBER Working Papers 10585, National Bureau of Economic Research, Inc.
  2. Jeffrey A. Frankel, 2003. "The Environment and Globalization," NBER Working Papers 10090, National Bureau of Economic Research, Inc.
  3. Pargal, Sheoli & Wheeler, David, 1995. "Informal regulation of industrial pollution in developing countries : evidence from Indonesia," Policy Research Working Paper Series 1416, The World Bank.
  4. Eskeland, Gunnar S. & Harrison, Ann E., 2003. "Moving to greener pastures? Multinationals and the pollution haven hypothesis," Journal of Development Economics, Elsevier, vol. 70(1), pages 1-23, February.
  5. Beata K. Smarzynska & Shang-Jin Wei, 2001. "Pollution Havens and Foreign Direct Investment: Dirty Secret or Popular Myth?," NBER Working Papers 8465, National Bureau of Economic Research, Inc.
  6. ZhongXiang Zhang, 2003. "Open Trade with the U.S. without Compromising Canada’s Ability to Comply with its Kyoto Target," Working Papers 2003.68, Fondazione Eni Enrico Mattei.
  7. Francesco Ricci, 2007. "Environmental policy and growth when inputs are differentiated in pollution intensity," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 38(3), pages 285-310, November.
  8. Mulatu Abay & Florax Raymond J.G.M. & Withagen Cees, 2003. "Environmental Regulation and International Trade: Empirical Results for Germany, the Netherlands and the US, 1977-1992," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(2), pages 1-30, December.
  9. Abay Mulatu & Raymond J.G.M. Florax & Cees A. Withagen, 2004. "Environmental Regulation and International Trade," Tinbergen Institute Discussion Papers 04-020/3, Tinbergen Institute.
  10. Busse, Matthias, 2004. "Trade, environmental regulations and the World Trade Organization : new empirical evidence," Policy Research Working Paper Series 3361, The World Bank.
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