METHODSEnvironmental policy in the European Union: Fostering the development of pollution havens?
Section snippets
Pollution havens
The 1990s was a decade in which environmental standards were tightened throughout the developed world. This rise in environmental stringency has led to a discussion about the pollution haven hypothesis (PHH). The PHH proposes that environmental stringency differences between developed and developing countries, encourages developing countries to specialize and gain a comparative advantage in the production of “dirty” goods. If the PHH holds, developed nations should observe a rise in imports of
New EU environmental policy implementation period
In 1957, six European States signed the Treaty of Rome and formed the European Economic Community (EC). The primary goal of the Treaty was to increase economic performance for member nations. No explicit provisions for environmental policies, environmental agencies, or environmental law were made (Jordan, 2005, p1). It was not until the late 1960s and 1970s when the U.S. Clean Air Act Amendments were passed, and Europe experienced a period of rising income and wages, that the EC became
EU trade
The purpose of this paper is to examine the PHH with respect to the EU. We start by defining the EU as the fifteen countries that joined by 1995, each country is included as part of the EU from the year that they join.7
Energy index and results for fossil fuel pollution havens
The first measure of industry dirtiness that we use is an energy intensity index similar to the one used by Kahn and Yoshino (2004), Eskeland and Harrison (2003), Kahn (2003), and Xing and Kolstad (2002). However, we use an index based on EU production. This index denotes those industries that are dirty in the sense that they use a lot of fossil fuels in the production process. Eskeland and Harrison (2003) and Kahn (2003) have shown that energy consumption may be used to proxy for pollution
Toxic index and results for toxic pollution havens
The second measure of industry pollution is the Toxic Release Inventory (TRI) index17
Discussion and conclusion
The overall results vary depending on the definition of industry dirtiness. There is evidence that the EU imported an increased amount of energy intensive goods from poorer nations during a period of more stringent environmental standards. This result is not consistent when we break down trading partners by membership in the OECD and regional definition. Apparently low income countries all together are driving the pollution haven effect, but that this is not a regional effect.
The results are
Acknowledgements
We would like to thank Per Fredriksson, John List, Jenny Minier, anonymous reviewers, and participants at the 2004 Association of Environmental and Resource Economists/Southern Economic Association meetings for their helpful comments and advice. The authors alone, however, are responsible for the views in this paper.
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2020, Economic ModellingCitation Excerpt :Section 5 provides the empirical evidence and the last section concludes. The empirical studies in the literature on international trade and the environment can be categorized into three different approaches: (1)studies investigating the effect of international trade on pollution emission from domestic production (Grossman and Krueger, 1993; Antweiler et al., 2001; Cole and Elliot, 2003; Frankel and Rose, 2005; Managi et al., 2009; Roy, 2017; Shahbaz et al., 2017; Kim et al., 2019), (2)studies investigating the effect of environmental regulations on international trade of dirty industries (Tobey, 1990; Ederington et al., 2004, 2005; Cave and Blomquist, 2008; Levinson and Taylor, 2008; Cole et al., 2010; Tsurumi et al., 2015), and (3)studies measuring the pollution emission embedded in international trade (Muradian et al., 2002; Ederington et al., 2004; Pan et al., 2008; Peters and Herwich, 2006; Levinson, 2009; Peters et al., 2011; Douglas and Nishioka, 2012; Grether and Mathys, 2013; He and Fu, 2014; Xu and Dietzenbacher, 2014; Duan and Jiang, 2017; Liddle, 2018; Honma and Yoshida, 2019). The BEET including this study is most closely related to the last approach.
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