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Pollution Havens and the Trade in Toxic Chemicals: Evidence from U.S. Trade Flows

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  • John P. Tang

Abstract

Does increased environmental protection decrease the emission of pollutants or merely displace them? Using newly available trade data, this study examines the flows of a panel of chemicals designated as toxic by the U.S. Environmental Protection Agency’s Toxics Release Inventory (TRI). Estimates from a differences-in-differences model indicate a significant increase in net imports when a chemical is listed on TRI, which suggests production offshoring. Furthermore, I find that increased imports due to this “pollution haven effect” are sourced disproportionately from poorer countries, which are likely to have lower environmental protection standards. At the same time, I observe the bulk of American trade in toxic chemicals occurs with other wealthy countries, which may be attributed to the capital intensity of chemical production.

Suggested Citation

  • John P. Tang, 2010. "Pollution Havens and the Trade in Toxic Chemicals: Evidence from U.S. Trade Flows," Working Papers 10-12, Center for Economic Studies, U.S. Census Bureau.
  • Handle: RePEc:cen:wpaper:10-12
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    References listed on IDEAS

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    1. repec:eee:enepol:v:113:y:2018:i:c:p:356-367 is not listed on IDEAS
    2. Markusen, James R., 2012. "Per-Capita Income as a Determinant of International Trade and Environmental Policies," Discussion Papers 2013-06, Graduate School of Economics, Hitotsubashi University.
    3. Dirk Czarnitzki & Christian Rammer & Andrew Toole, 2014. "University spin-offs and the “performance premium”," Small Business Economics, Springer, vol. 43(2), pages 309-326, August.
    4. Michael Schymura & Andreas Löschel, 2012. "Trade and the Environment: An Application of the WIOD Database," EcoMod2012 3948, EcoMod.
    5. Day Manoli & Andrea Weber, 2016. "Nonparametric Evidence on the Effects of Financial Incentives on Retirement Decisions," American Economic Journal: Economic Policy, American Economic Association, vol. 8(4), pages 160-182, November.
    6. Balsalobre-Lorente, Daniel & Shahbaz, Muhammad & Roubaud, David & Farhani, Sahbi, 2018. "How economic growth, renewable electricity and natural resources contribute to CO2 emissions?," Energy Policy, Elsevier, pages 356-367.
    7. repec:eee:eneeco:v:64:y:2017:i:c:p:13-23 is not listed on IDEAS

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