Trade in environmental goods: empirical exploration of direct and indirect effects on pollution by country’s trade status

Mardi | 2018-09-11
Salle des thèses 16h – 17h20


Based on panel data covering 114 countries, this study investigates the direct, indirect and total effects of trade flows in environmental goods (EGs) on total CO2 and SO2 emissions. Our multiple-equation GMM estimations reveal positive direct scale – [between-industry] composition effects prevailing on the negative direct technique – [within-industry] composition effects (if any), as well as compensating the significant indirect technique effects channelled by the stringency of environmental regulations and per capita income. If the net importers of EGs (namely from the APEC54 and WTO26 lists) are recurrently found to face increased pollution (in particular CO2 emissions) due to direct scale-composition effects of trade in EGs, the EGs’ net exporters are more likely to see their pollution to decrease, in particular thanks to income-induced effects. We show that the direct, indirect and total effects of trade in EGs depend on the country’s net trade status, the EGs’ classification and the pollutant considered. For instance, only trade in EGs from ‘renewable energy’ category is found to decrease both CO2 and SO2 emissions in both EGs’ net exporting and net importing countries. Surprisingly, trade in EGs from ‘air pollution control’ category appears to have no effect on air pollution.