The world trade network and the environment

Carlos Aller (), Lorenzo Ductor and Maria Jesus Herrerias ()

Energy Economics, 2015, vol. 52, issue PA, 55-68

Abstract: This paper analyses the role of the world trade network on the environment. We rely on methods developed for social network analysis to identify the most important countries in connecting trade between all the other countries in the world trade network. We then estimate how the network or indirect effects from trade affect the environmental quality of a country. As the trade networks are endogenously determined by trade and environmental conditions, we use as instrumental variables the growth in the population of trade partners and the growth in the population of trade partners' partners to exploit exogenous variation in the world trade network. Once we simultaneously estimate the environmental, trade, income, and network equations using a three-stage least square procedure, we find that network effects harm the environmental quality of developed countries but improve the environment of developing countries.

Keywords: World trade network; Carbon dioxide emissions; Centrality measures (search for similar items in EconPapers)
JEL-codes: C33 F18 O50 Q56 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (41)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:52:y:2015:i:pa:p:55-68

DOI: 10.1016/j.eneco.2015.09.008

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