Is Free Trade Good for the Environment?

Werner Antweiler, Brian Copeland () and M. Scott Taylor

American Economic Review, 2001, vol. 91, issue 4, 877-908

Abstract: This paper investigates how openness to international goods markets affects pollution concentrations. We develop a theoretical model to divide trade's impact on pollution into scale, technique, and composition effects and then examine this theory using data on sulfur dioxide concentrations. We find international trade creates relatively small changes in pollution concentrations when it alters the composition of national output. Estimates of the trade-induced technique and scale effects imply a net reduction in pollution from these sources. Combining our estimates of all three effects yields a somewhat surprising conclusion: freer trade appears to be good for the environment.

JEL-codes: F18 Q25 (search for similar items in EconPapers)
Date: 2001
Note: DOI: 10.1257/aer.91.4.877
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Citations: View citations in EconPapers (1302)

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Working Paper: Is Free Trade Good for the Environment? (1998)
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