Trade and the Environment Theory and Evidence

Table of contents

Preface vii

1. The trade and Environment Debate 1
1.1 Globalization and the Trade versus Environment Debate 1
1.2 Two questions and a preview of our Answers 2
1.3 Our method of Analysis 6
1.4 Plan of the Book 9
2. Pollution in a small open Economy 12
2.1 Technology 16
2.2 Equilibrium along the Net and Potential production Frontiers 26
2.3 Scale, composition, and Technique effects 45
2.4 Endogenous pollution policy 56
2.5 Conclusion 65
3. Is there an Environmental Kuznets Curve? 67
3.1 Equilibrium pollution and the Environmental Kuznets curve 71
3.2 Source of growth 74
3.3 Income effects 78
3.4 Threshold Effects 86
3.5 Increasing returns to Abatement 97
3.6 Conclusion 104
4. Trade Liberalization and Environmental quality 107
4.1 Trade frictions 110
4.2 Trade Liberalization with Rigid pollution policy 112
4.3 Trade Liberalization with flexible pollution policy 123
4.4 The political economy motive 132
4.5 Conclusion 139
5. Pollution Haven models of international trade 142
5.1 Exogenous policy Differences: Rigid Emission Intensities 146
5.2 Exogenous policy differences: marketable permit systems 153
5.3 Exogenous pollution Haves 158
5.4 Global pollution and the world composition Effect 164
5.5 Environmentally friendly pollution Havens 170
5.6 Northern and southern Institutional differences 171
5.7 Conclusion 183
6. Factor endowment, policy differences, and pollution 187
6.1 Exogenous policy: The role of factor endowments 189
6.2 Exogenous policy: factor endowment and comparative advantage 196
6.3 Correlated characteristics: being rich and capital abundant 200
6.4 An illustrative example 206
6.5 Conclusion 213
7. Is free trade good for the environment? An empirical assessment 215
7.1 The three questions that deserve an answer 220
7.2 The pollution Data 223
7.3 Deriving the reduced form 227
7.4 Form theory to estimation 239
7.5 Empirical results 250
7.6 Alternative specifications and Theories 261
7.7 Conclusion 27
8. Summary and conclusions 275
8.1 Flexible pollution policy 275
8.2 Growth is not trade 276
8.3 The pollution Haven and factor endowments Hypotheses 277
8.4 Directions for future research 280
References 285

Index 291