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The pollution terms of trade and its five components

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  • Grether, Jean-Marie
  • Mathys, Nicole A.

Abstract

Based on two extensions, this paper proposes a re-appraisal of the concept of the pollution terms of trade (PTT) introduced by Antweiler (1996). First, detailed data allows capturing the effect of differences in emission intensities across countries and over time. Second, relying on Johnson and Noguera (2012), the revised PTT index controls for trade in intermediate goods and is based on value-added rather than gross output figures. Applied to a database for SO2 emission intensities for 62 developed and developing countries over the 1990–2000 period, it turns out that the first extension has a larger empirical importance than the second one. The global pattern is one in which the major rich economies exhibit a PTT index below one (higher pollution intensity in imports than in exports). Trade imbalances tend to exacerbate this asymmetry, allowing rich economies to further offshore their pollution through trade.

Suggested Citation

  • Grether, Jean-Marie & Mathys, Nicole A., 2013. "The pollution terms of trade and its five components," Journal of Development Economics, Elsevier, vol. 100(1), pages 19-31.
  • Handle: RePEc:eee:deveco:v:100:y:2013:i:1:p:19-31
    DOI: 10.1016/j.jdeveco.2012.06.007
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    References listed on IDEAS

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    Cited by:

    1. Honma, Satoshi & Yoshida, Yushi, 2017. "Convergence in pollution terms of trade," MPRA Paper 78810, University Library of Munich, Germany.
    2. Duan, Yuwan & Jiang, Xuemei, 2017. "Temporal Change of China's Pollution Terms of Trade and its Determinants," Ecological Economics, Elsevier, vol. 132(C), pages 31-44.
    3. Satoshi Honma & Yushi Yoshida, 2018. "Convergence in pollution terms of trade," Discussion Papers CRR Discussion Paper Series A: General 48, Shiga University, Faculty of Economics,Center for Risk Research.
    4. Keisuke Kawata & Yasunori Ouchida, 2013. "Offshoring, trade and environmental policies: Effects of transboundary pollution," IDEC DP2 Series 3-8, Hiroshima University, Graduate School for International Development and Cooperation (IDEC).
    5. Sylvain Weber & Reyer Gerlagh & Nicole A. Mathys & Daniel Moran, 2017. "CO2 embedded in trade: trends and fossil fuel drivers," Development Working Papers 413, Centro Studi Luca d'Agliano, University of Milano, revised 21 Feb 2017.
    6. repec:taf:teepxx:v:7:y:2018:i:1:p:57-68 is not listed on IDEAS

    More about this item

    Keywords

    Trade-embodied emissions; Traded intermediates; Pollution terms of trade;

    JEL classification:

    • F1 - International Economics - - Trade
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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