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Unraveling the World-Wide Pollution Haven Effect

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  • Jean-Marie GRETHER
  • Nicole A. MATHYS
  • Jaime DE MELO

Abstract

This paper contributes to the debate on the existence of pollution haven effects by systematically measuring the pollution content of trade (measured by the polluction content of imports (PCI)) and decomposing it into three components: a 'deep' (i.e. unrelated to the environmental debate) component and two components (factor endowments and environmental policies) that occupy centerstage in the debate on trade and the environment. The decomposition is carried out for 1986-88 for an extensive data set covering 10 pollutants, 48 countries and 79 ISIC 4-digit sectors. Illustrative decompositions presented for 3 of the 10 pollutants in the data set indicate a significant pollution haven effect and highlight the role of factor endowments in each region's PCI. However, because the bulk of trade is intra-regional with a high North-North share, these effects are small relative to the 'deep' determinants of the worldwide pollution content of trade.

Suggested Citation

  • Jean-Marie GRETHER & Nicole A. MATHYS & Jaime DE MELO, 2006. "Unraveling the World-Wide Pollution Haven Effect," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 06.04, Université de Lausanne, Faculté des HEC, DEEP.
  • Handle: RePEc:lau:crdeep:06.04
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    References listed on IDEAS

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    Cited by:

    1. Nicole A. MATHYS & Jaime DE MELO, 2011. "The Political Economy of Climate Change Policies: Political Economy Aspects of Climate Change Mitigation Efforts," Working Papers P24, FERDI.
    2. Rahel Aichele, 2013. "Trade, Climate Policy and Carbon Leakage - Theory and Empirical Evidence," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 49.
    3. Jean-Marie Grether & Nicole Andréa Mathys & Jaime de Melo, 2015. "Unravelling the Worldwide Pollution Haven Effect," World Scientific Book Chapters,in: Developing Countries in the World Economy, chapter 23, pages 581-612 World Scientific Publishing Co. Pte. Ltd..
    4. Nicole A. MATHYS & Jaime DE MELO, 2012. "Reconciling Trade and Climate Policies," Working Papers P37, FERDI.
    5. John McCollough & Miao He & Arzu Tay Bayramoglu, 2016. "Pollution Havens and Their Relationship to the Environmental Kuznets Curve: The Case of the us Tyre Industry," Economic Affairs, Wiley Blackwell, vol. 36(3), pages 258-272, October.
    6. Massimiliano Mazzanti & Anna Montini & Roberto Zoboli, 2007. "Economic Dynamics, Emission Trends and the EKC Hypothesis New Evidence Using NAMEA and Provincial Panel Data for Italy," Working Papers 2007.24, Fondazione Eni Enrico Mattei.
    7. de Melo, Jaime & Mathys, Nicole Andréa, 2010. "Trade and Climate Change: The Challenges Ahead," CEPR Discussion Papers 8032, C.E.P.R. Discussion Papers.
    8. de Melo, Jaime, 2012. "Trade in a'green growth'development strategy : global scale issues and challenges," Policy Research Working Paper Series 6236, The World Bank.
    9. Horatiu A. Rus, 2016. "Renewable Resources, Pollution and Trade," Review of International Economics, Wiley Blackwell, vol. 24(2), pages 364-391, May.
    10. 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.
    11. Thais NUNEZ-ROCHA & Inmaculada MARTíNEZ-ZARZOSO, 2018. "Is National Environmental Legislation Affecting Emissions?," LEO Working Papers / DR LEO 2505, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    12. Millimet, Daniel L., 2013. "Environmental Federalism: A Survey of the Empirical Literature," IZA Discussion Papers 7831, Institute for the Study of Labor (IZA).
    13. Jean-Marie Grether & Nicole A. Mathys & Jaime de Melo, 2007. "Trade, Technique and Composition Effects: What is Behind the Fall in World-Wide SO2 Emissions 1990-2000?," Working Papers 2007.93, Fondazione Eni Enrico Mattei.
    14. Chris Milner & Fangya Xu, "undated". "On The Pollution Content of China’s Trade: Clearing the Air?," Discussion Papers 09/19, University of Nottingham, GEP.
    15. Massimiliano Mazzanti & Anna Montini & Roberto Zoboli, 2008. "Environmental Kuznets Curves for Air Pollutant Emissions in Italy: Evidence from Environmental Accounts (NAMEA) Panel Data," Economic Systems Research, Taylor & Francis Journals, vol. 20(3), pages 277-301.
    16. Ivan Tilov & Benjamin Volland & Mehdi Farsi, 2017. "Interactions in Swiss Households' Energy Demand: A Holistic Approach," IRENE Working Papers 17-11, IRENE Institute of Economic Research.
    17. Jaime de Melo & Nicole A. Mathys, 2012. "Concilier les politiques commerciales et les politiques climatiques," Revue d’économie du développement, De Boeck Université, vol. 20(2), pages 57-81.
    18. Mireille Chiroleu-Assouline, 2015. "La fiscalité environnementale en France peut-elle devenir réellement écologique ?. État des lieux et conditions d’acceptabilité," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(3), pages 129-165.

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    Keywords

    trade and the environment; pollution haven;

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment

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