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Do environmental policies affect global value chains?: A new perspective on the pollution haven hypothesis

Author

Listed:
  • Tomasz Koźluk

    (OECD)

  • Christina Timiliotis

Abstract

Increasing international fragmentation of production has reinforced fears that industrial activity may flee to countries with laxer environmental policies – in line with the so-called Pollution Haven Hypothesis (PHH). If PHH effects are strong, domestic responses to environmental challenges may prove ineffective or meet strong resistance. Using a gravity model of bilateral trade in manufacturing industries for selected OECD and BRIICS countries over 1990s-2000s, this paper studies how exports are related to national environmental policies. Environmental policies are not found to be a major driver of international trade patterns, but have some significant effects on specialisation. More stringent domestic policies have no significant effect on overall trade in manufactured goods, but are linked to a comparative disadvantage in “dirty” industries, and a corresponding advantage in “cleaner” industries. The effects are stronger for the domestic component of exports than for gross exports, yet notably smaller than the effects of e.g. trade liberalisation. Les politiques environnementales ont-elles une incidence sur les chaînes de valeur mondiales ? : Un nouveau point de vue sur l'hypothèse du havre de pollution La fragmentation internationale croissante de la production a renforcé les craintes de voir l’activité industrielle migrer vers des pays dotés de politiques environnementales plus laxistes – selon ce qu’il est convenu d’appeler « l’hypothèse du havre de pollution » (HHP). Si cette hypothèse se vérifie effectivement, les efforts déployés au niveau national pour faire face aux défis environnementaux pourraient se révéler inopérants ou se heurter à une forte résistance. À l’aide d’un modèle gravitationnel des échanges commerciaux bilatéraux appliqué aux industries manufacturières de certains pays de l'OCDE et des BRIICS sur la période 1990-2009, ce rapport étudie le lien entre les exportations et les politiques environnementales nationales. Il en ressort que les politiques environnementales n’ont pas d’incidence déterminante sur les exportations globales, mais ont un effet significatif sur le spécialisation. Cependant, en modifiant les prix relatifs des intrants, les politiques nationales plus rigoureuses vont de pair avec un désavantage comparatif dans les industries « polluantes », et un avantage correspondant dans les industries « plus propres ». Ces effets sont particulièrement perceptibles pour la composante de valeur ajoutée nationale des exportations, mais sensiblement moins que ceux de la libéralisation des échanges, par exemple.

Suggested Citation

  • Tomasz Koźluk & Christina Timiliotis, 2016. "Do environmental policies affect global value chains?: A new perspective on the pollution haven hypothesis," OECD Economics Department Working Papers 1282, OECD Publishing.
    • Handle: RePEc:oec:ecoaaa:1282-en
    DOI: 10.1787/5jm2hh7nf3wd-en
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    Cited by:

    1. Aslihan Atabek & Dan Andrews & Rauf Gönenç, 2017. "Rebalancing Turkey’s growth by improving resource allocation and productivity in manufacturing," OECD Economics Department Working Papers 1367, OECD Publishing.
    2. Andersson, Malin & Baccianti, Claudio & Morgan, Julian, 2020. "Climate change and the macro economy," Occasional Paper Series 243, European Central Bank.
    3. Grégoire Garsous & Tomasz Kozluk, 2017. "Foreign Direct Investment and The Pollution Haven Hypothesis: Evidence from Listed Firms," OECD Economics Department Working Papers 1379, OECD Publishing.
    4. Suchita Srinivasan, 2017. "Driven up the wall? Role of environmental regulation in innovation along the automotive global value chain," CIES Research Paper series 52-2017, Centre for International Environmental Studies, The Graduate Institute.
    5. Huang, Bihong & Xu, Yining, 2019. "Environmental Performance in Asia: Overview, Drivers, and Policy Implications," ADBI Working Papers 990, Asian Development Bank Institute.
    6. Dechezleprêtre, Antoine & Kozluk, Tomasz & Kruse, Tobias & Nachtigall, Daniel & de Serres, Alain, 2019. "Do Environmental and Economic Performance Go Together? A Review of Micro-level Empirical Evidence from the Past Decade or So," International Review of Environmental and Resource Economics, now publishers, vol. 13(1-2), pages 1-118, April.
    7. Justyna Godawska & Joanna Wyrobek, 2021. "The Impact of Environmental Policy Stringency on Renewable Energy Production in the Visegrad Group Countries," Energies, MDPI, vol. 14(19), pages 1-23, September.
    8. Montek Ahluwalia & Himanshu Gupta & Nicholas Stern, 2016. "A More Sustainable Energy Strategy for India," Working Papers id:11096, eSocialSciences.
    9. Yingbin Zhang & Xiang Cai & Youjin Liu & Zhengli Xu & Junmei Gao & Sohail Ahmad Javeed, 2023. "What leads to pollution burden shifting among the Belt and Road countries? Evidence from 61 B&R countries," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(6), pages 4831-4862, June.
    10. Zhang, Zengkai & Zhu, Kunfu & Hewings, Geoffrey J.D., 2017. "A multi-regional input–output analysis of the pollution haven hypothesis from the perspective of global production fragmentation," Energy Economics, Elsevier, vol. 64(C), pages 13-23.
    11. Drudi, Francesco & Moench, Emanuel & Holthausen, Cornelia & Weber, Pierre-François & Ferrucci, Gianluigi & Setzer, Ralph & Adao, Bernardino & Dées, Stéphane & Alogoskoufis, Spyros & Téllez, Mar Delgad, 2021. "Climate change and monetary policy in the euro area," Occasional Paper Series 271, European Central Bank.
    12. Alassane D. Yeo & Aimin Deng, 2019. "The trade policy effect in international trade: case of Pakistan," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 8(1), pages 1-17, December.
    13. Edquist, Harald & Bergmark, Pernilla, 2024. "How is mobile broadband intensity affecting CO2 emissions? – A macro analysis," Telecommunications Policy, Elsevier, vol. 48(2).
    14. Maria Borga & Perla Ibarlucea Flores & Monika Sztajerowska, 2020. "Drivers of divestment decisions of multinational enterprises - A cross-country firm-level perspective," OECD Working Papers on International Investment 2019/03, OECD Publishing.
    15. Ilker Akar, 2019. "The Pollution Haven Hypothesis and Foreign Trade - A Survey on the Relation with Environment," Economics Literature, WERI-World Economic Research Institute, vol. 1(1), pages 37-50, June.
    16. Thi Anh Dam & Markus Pasche & Niclas Werlich, 2017. "Trade Patterns and the Ecological Footprint - a theory-based Empirical Approach," Jena Economics Research Papers 2017-005, Friedrich-Schiller-University Jena.

    More about this item

    Keywords

    chaînes de valeur mondiales; comparative advantage; competitiveness; compétitivité; environmental policy stringency; global value chains; hypothèse du havre de pollution; politique environnementale; Pollution Haven Hypothesis; trade; échanges commerciaux;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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