Trade in Environmental Goods: Empirical Exploration of Direct and Indirect Effects on Pollution by Country’s Trade Status
No 2017.56, Working Papers from Fondazione Eni Enrico Mattei
Based on panel data covering 114 countries in the world, this study investigates the direct, indirect and total effects of trade flows in environmental goods (EG) on total CO2 and SO2 emissions. Our system-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 local 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.
Keywords: Environmental Goods; Environmental Policy; Net Exporter; Net Importer; Pollution; Trade (search for similar items in EconPapers)
JEL-codes: F13 F14 F18 Q53 Q56 Q58 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-ene, nep-env, nep-int and nep-res
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Working Paper: Trade in Environmental Goods: Empirical Exploration of Direct and Indirect Effects on Pollution by Country’s Trade Status (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2017.56
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