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International Trade and the Environment: Three Remaining Empirical Challenges

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  • Jevan M. Cherniwchan
  • M. Scott Taylor

Abstract

Considerable progress has been made in our understanding of the relationship between international trade and the environment since Gene Grossman and Alan Krueger published their now seminal working paper examining the potential environmental effects of the North American Free Trade Agreement in 1991. This review uses their original paper as a guide to highlight key developments along three main branches of research that all stem from their analysis: (i) the interaction between international trade, economic growth, and environmental outcomes, (ii) the role of environmental regulation in determining trade and investment flows, and (iii) estimating the relative magnitudes of the scale, composition, and technique effects induced by trade. It discusses key developments along each branch, with a particular focus on the empirical challenges that have impeded progress. It also highlights an area along each branch that is ripe for further study. These areas are termed the Three Remaining Challenges.

Suggested Citation

  • Jevan M. Cherniwchan & M. Scott Taylor, 2022. "International Trade and the Environment: Three Remaining Empirical Challenges," NBER Working Papers 30020, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:30020
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    Cited by:

    1. Chiappini, Raphaël & Gerard, Enea, 2025. "Environmental regulation and foreign direct investments: evidence from a new measure of environmental stringency," Macroeconomic Dynamics, Cambridge University Press, vol. 29, pages 1-1, January.
    2. Antweiler, Werner & Schlund, David, 2024. "The emerging international trade in hydrogen: Environmental policies, innovation, and trade dynamics," Journal of Environmental Economics and Management, Elsevier, vol. 127(C).
    3. repec:osf:socarx:hy3np_v1 is not listed on IDEAS
    4. Carreira, Igor & Costa, Francisco & Pessoa, João Paulo, 2024. "The deforestation effects of trade and agricultural productivity in Brazil," Journal of Development Economics, Elsevier, vol. 167(C).
    5. Carlos G'oes & Otavio Conceic{c}~ao & Gabriel Lara Ibarra & Gladys Lopez-Acevedo, 2025. "Exports, Labor Markets, and the Environment: Evidence from Brazil," Papers 2508.03855, arXiv.org.
    6. Darwili, Aldy & Schröder, Enno, 2025. "Which countries have offshored carbon dioxide emissions in net terms?," Ecological Economics, Elsevier, vol. 235(C).
    7. Juan Huang & Ziyi Wu, 2022. "Impact of Environmental Regulations on Export Trade—Empirical Analysis Based on Zhejiang Province," IJERPH, MDPI, vol. 19(19), pages 1-14, October.

    More about this item

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General

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