North-South Displacement Effects of Environmental Regulation: The Case of Battery Recycling

65 Pages Posted: 28 Aug 2021 Last revised: 19 May 2022

See all articles by Shinsuke Tanaka

Shinsuke Tanaka

Tufts University - The Fletcher School of Law and Diplomacy

Kensuke Teshima

Hitotsubashi University

Eric A. Verhoogen

Columbia University - School of International & Public Affairs (SIPA); IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR)

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Abstract

This study examines the effect of a tightening of the U.S. air-quality standard for lead in 2009 on the relocation of battery recycling to Mexico and on infant health in Mexico. In the U.S., airborne lead dropped sharply near affected plants, most of which were battery-recycling plants. Exports of used batteries to Mexico rose markedly. In Mexico, production increased at battery-recycling plants, relative to comparable industries, and birth outcomes deteriorated within two miles of those plants, relative to areas slightly farther away. The case provides a salient example of a pollution-haven effect between a developed and a developing country.

Keywords: pollution-haven hypothesis, environmental regulation, infant health

JEL Classification: F18, Q56, O15

Suggested Citation

Tanaka, Shinsuke and Teshima, Kensuke and Verhoogen, Eric A., North-South Displacement Effects of Environmental Regulation: The Case of Battery Recycling. IZA Discussion Paper No. 14664, Available at SSRN: https://ssrn.com/abstract=3913025

Shinsuke Tanaka (Contact Author)

Tufts University - The Fletcher School of Law and Diplomacy ( email )

Medford, MA 02155
United States

Kensuke Teshima

Hitotsubashi University

Eric A. Verhoogen

Columbia University - School of International & Public Affairs (SIPA) ( email )

420 West 118th Street
New York, NY 10027
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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