Waste Trade and Environmental Regulation: Reallocation Effects of the EU Waste Shipment Regulation

Thais Nunez-Rocha ()
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Thais Nunez-Rocha: LEO - Laboratoire d'Économie d'Orleans [2022-...] - UO - Université d'Orléans - UT - Université de Tours - NEOLAiA - NEOLAiA European University = Université Européenne NEOLAÏA - UCA - Université Clermont Auvergne

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Abstract: This paper examines the impact of the European Union Waste Shipment Regulation (EU-WSR), implemented in 2007, on the geography of hazardous waste trade. While the regulation strengthened restrictions on exports to non-OECD countries, its effect on the direction of waste flows remains unclear. Using bilateral hazardous waste trade data, I investigate whether the EU-WSR altered the destination of hazardous waste exports. To identify the effects of the regulation, I estimate a series of Poisson Pseudo-Maximum Likelihood (PPML) event-study specifications that trace the evolution of hazardous waste exports before and after the implementation of the regulation. I find evidence consistent with a reallocation of hazardous waste exports toward the EU10 countries. Event-study estimates reveal no significant pre-treatment trends and show a persistent increase in exports toward EU10 destinations relative to other OECD destinations following the implementation of the EU-WSR. By contrast, comparable patterns are not observed for other OECD destinations, and there is little evidence of a significant decline in exports toward developing countries. The evidence therefore points to a process of destination substitution rather than a broad relocation of exports toward all legally accessible destinations. These findings suggest that environmental regulations may reshape the geography of hazardous waste trade rather than eliminate such flows. More generally, the paper highlights the importance of destination-substitution effects when evaluating the consequences of environmental trade regulations.

Date: 2026-09-13
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