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Trade and the Environment : Theory and Evidence - Brian R. Copeland

Trade and the Environment

Theory and Evidence

Paperback Published: 7th August 2005
ISBN: 9780691124001
Number Of Pages: 304

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Nowhere has the divide between advocates and critics of globalization been more striking than in debates over free trade and the environment. And yet the literature on the subject is high on rhetoric and low on results. This book is the first to systematically investigate the subject using both economic theory and empirical analysis. Brian Copeland and Scott Taylor establish a powerful theoretical framework for examining the impact of international trade on local pollution levels, and use it to offer a uniquely integrated treatment of the links between economic growth, liberalized trade, and the environment. The results will surprise many.

The authors set out the two leading theories linking international trade to environmental outcomes, develop the empirical implications, and examine their validity using data on measured sulfur dioxide concentrations from over 100 cities worldwide during the period from 1971 to 1986.

The empirical results are provocative. For an average country in the sample, free trade is good for the environment. There is little evidence that developing countries will specialize in pollution-intensive products with further trade. In fact, the results suggest just the opposite: free trade will shift pollution-intensive goods production from poor countries with lax regulation to rich countries with tight regulation, thereby lowering world pollution. The results also suggest that pollution declines amid economic growth fueled by economy-wide technological progress but rises when growth is fueled by capital accumulation alone.

Lucidly argued and authoritatively written, this book will provide students and researchers of international trade and environmental economics a more reliable way of thinking about this contentious issue, and the methodological tools with which to do so.

Industry Reviews

Winner of the 2004 Doug Purvis Memorial Prize, Canadian Economics Association "Copeland and Taylor have opened the way to a better dialogue between economists and environmentalists. Their book will surely take its place on the shelves of trade economists and environmentalists."--James Anderson, Journal of International Economics "[A] well-written book... As Copeland and Taylor make clear, there is a good deal of scope for additional research on the topic of trade and environment, and this book provides a great starting point for such research."--Josh Ederington, World Trade Review "This book is systematically developed and well presented."--Richard N. Cooper, Environment "This book takes 'trade and the environment' from toddling to a brisk walk and indicates that it has come of age as a subfield... [It] strives, very successfully, to link its theory to empirical work."--Martin Richardson, Economic Record

Prefacep. vii
The Trade and Environment Debatep. 1
Globalization and the Trade versus Environment Debatep. 1
Two Questions and a Preview of Our Answersp. 2
Our Method of Analysisp. 6
Plan of the Bookp. 9
Pollution in a Small Open Economyp. 12
Technologyp. 16
Equilibrium along the Net and Potential Production Frontiersp. 26
Scale, Composition, and Technique Effectsp. 45
Endogenous Pollution Policyp. 56
Conclusionp. 65
Is There an Environmental Kuznets Curve?p. 67
Equilibrium Pollution and the Environmental Kuznets Curvep. 71
Sources of Growthp. 74
Income Effectsp. 78
Threshold Effectsp. 86
Increasing Returns to Abatementp. 97
Conclusionp. 104
Trade Liberalization and Environmental Qualityp. 107
Trade Frictionsp. 110
Trade Liberalization with Rigid Pollution Policyp. 112
Trade Liberalization with Flexible Pollution Policyp. 123
The Political Economy Motivep. 132
Conclusionp. 139
Pollution Haven Models of International Tradep. 142
Exogenous Policy Differences: Rigid Emission Intensitiesp. 146
Exogenous Policy Differences: Marketable Permit Systemsp. 153
Endogenous Pollution Havensp. 158
Global Pollution and the World Composition Effectp. 164
Environmentally Friendly Pollution Havensp. 170
Northern and Southern Institutional Differencesp. 171
Conclusionp. 183
Factor Endowments, Policy Differences, and Pollutionp. 187
Exogenous Policy: The Role of Factor Endowmentsp. 189
Endogenous Policy: Factor Endowments and Comparative Advantagep. 196
Correlated Characteristics: Being Rich and Capital Abundantp. 200
An Illustrative Examplep. 206
Conclusionp. 213
Is Free Trade Good for the Environment? An Empirical Assessmentp. 215
Three Questions That Deserve an Answerp. 220
The Pollution Datap. 223
Deriving the Reduced Formp. 227
From Theory to Estimationp. 239
Empirical Resultsp. 250
Alternative Specifications and Theoriesp. 261
Conclusionp. 271
Summary and Conclusionsp. 275
Flexible Pollution Policyp. 275
Growth Is Not Tradep. 276
The Pollution Haven and Factor Endowments Hypothesesp. 277
Directions for Future Researchp. 280
Referencesp. 285
Indexp. 291
Table of Contents provided by Publisher. All Rights Reserved.

ISBN: 9780691124001
ISBN-10: 0691124000
Series: Princeton Series in International Economics
Audience: Tertiary; University or College
Format: Paperback
Language: English
Number Of Pages: 304
Published: 7th August 2005
Publisher: Princeton University Press
Country of Publication: US
Dimensions (cm): 21.59 x 13.97  x 1.27
Weight (kg): 0.41