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Are RTA agreements with environmental provisions reducing emissions?

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  • Baghdadi, Leila
  • Martinez-Zarzoso, Inmaculada
  • Zitouna, Habib

Abstract

This paper investigates whether RTAs with environmental provisions affect relative and absolute pollution levels. In order to do so, the determinants of carbon dioxide emissions convergence are estimated for a cross-section of 182 countries over the period 1980 to 2008. A propensity score matching approach is combined with difference-in-differences techniques to effectively isolate the effect of the Regional Trade Agreement (RTA) variable. The usual controls for scale, composition and technique effects are added to the estimated model and the endogeneity of income and trade variables is modeled using instruments. The main results indicate that the CO2 emissions of the pairs of countries that belong to an RTA with environmental provisions tend to converge and are lower in absolute terms, whereas this is not the case for RTAs without environmental provisions. As regards specific agreements, we find that emissions converge more rapidly for NAFTA than for EU-27 and Euro-Med countries. We find consistent evidence that only RTAs with environmental harmonization policies affect relative and absolute pollution levels.

Suggested Citation

  • Baghdadi, Leila & Martinez-Zarzoso, Inmaculada & Zitouna, Habib, 2013. "Are RTA agreements with environmental provisions reducing emissions?," Journal of International Economics, Elsevier, vol. 90(2), pages 378-390.
  • Handle: RePEc:eee:inecon:v:90:y:2013:i:2:p:378-390 DOI: 10.1016/j.jinteco.2013.04.001
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Derek Kellenberg & Arik Levinson, 2016. "Misreporting Trade: Tariff Evasion, Corruption, and Auditing Standards," NBER Working Papers 22593, National Bureau of Economic Research, Inc.
    2. repec:hal:journl:halshs-01339837 is not listed on IDEAS
    3. Fujii, Hidemichi & Managi, Shunsuke, 2015. "Optimal production resource reallocation for CO2 emissions reduction in manufacturing sectors," MPRA Paper 64703, University Library of Munich, Germany.
    4. Fiankor, Dela-Dem Doe & Ehrich, Malte & Brümmer, Bernhard, 2016. "EU-African Regional Trade Agreements as a Development Tool to Reduce EU Border Rejections," Discussion Papers 244352, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    5. Martínez-Zarzoso, Inmaculada & Oueslati, Walid, 2016. "Are deep and comprehensive regional trade agreements helping to reduce air pollution?," Center for European, Governance and Economic Development Research Discussion Papers 292, University of Goettingen, Department of Economics.
    6. Thais Nuñez-Rocha, 2016. "Waste haven effect: unwrapping the impact of environmental regulation," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01339837, HAL.
    7. Iris Butzlaff & Nicole Grunewald & Stephan Klasen, 2013. "Regional Agreements to Address Climate Change: Scope, Promise, Funding, and Impacts," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 152, Courant Research Centre PEG.
    8. repec:kap:enreec:v:67:y:2017:i:1:d:10.1007_s10640-015-9975-0 is not listed on IDEAS
    9. Aller, Carlos & Ductor, Lorenzo & Herrerias, M.J., 2015. "The world trade network and the environment," Energy Economics, Elsevier, vol. 52(PA), pages 55-68.
    10. repec:eee:inecon:v:108:y:2017:i:c:p:82-98 is not listed on IDEAS
    11. Egger, Peter & Tarlea, Filip, 2017. "Comparing Apples to Apples: Estimating Consistent Partial Effects of Preferential Economic Integration Agreements," CEPR Discussion Papers 11894, C.E.P.R. Discussion Papers.
    12. Roy, Jayjit, 2017. "On the environmental consequences of intra-industry trade," Journal of Environmental Economics and Management, Elsevier, vol. 83(C), pages 50-67.

    More about this item

    Keywords

    Regional trade agreements; Environmental provisions; Convergence; CO2 emissions; Matching; Difference-in-differences;

    JEL classification:

    • F - International Economics
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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