Unraveling the World-Wide Pollution Haven Effect

27 Pages Posted: 16 Sep 2006

See all articles by Jean-Marie Grether

Jean-Marie Grether

University of Neuchatel - Institute for Economic and Regional Research (IRER)

Nicole A. Mathys

University of Neuchatel - Faculty of Economics and Social Sciences; Federal Office for Spatial Development

Jaime de Melo

University of Geneva - Department of Political Economics; Centre for Economic Policy Research (CEPR); World Bank

Multiple version iconThere are 2 versions of this paper

Date Written: September 2006

Abstract

This paper contributes to the debate on the existence of pollution haven effects by systematically measuring the pollution content of trade (measured by the pollution content of imports (PCI)) and decomposing it into three components: a 'deep' (i.e. unrelated to the environmental debate) component and two components (factor endowments and environmental policies) that occupy centerstage in the debate on trade and the environment. The decomposition is carried out for 1986-88 for an extensive data set covering 10 pollutants, 48 countries and 79 ISIC 4-digit sectors. Illustrative decompositions presented for 3 of the 10 pollutants in the data set indicate a significant pollution haven effect and highlight the role of factor endowments in each region's PCI. However, because the bulk of trade is intra-regional with a high North-North share, these effects are small relative to the 'deep' determinants of the worldwide pollution content of trade.

Keywords: Trade and the environment, pollution haven

JEL Classification: F18

Suggested Citation

Grether, Jean-Marie and Mathys, Nicole Andréa and de Melo, Jaime, Unraveling the World-Wide Pollution Haven Effect (September 2006). CEPR Discussion Paper No. 5815. Available at SSRN: https://ssrn.com/abstract=930565

Jean-Marie Grether

University of Neuchatel - Institute for Economic and Regional Research (IRER) ( email )

Pierre-a-Mazel 7
Neuchatel, CH-2000
Switzerland
+41 32 718 13 56 (Phone)
+41 32 718 14 01 (Fax)

Nicole Andréa Mathys

University of Neuchatel - Faculty of Economics and Social Sciences ( email )

Neuchatel, 2000
Switzerland

Federal Office for Spatial Development ( email )

Jaime De Melo (Contact Author)

University of Geneva - Department of Political Economics ( email )

40, boulevard du Pont-d'Arve
Geneva 4, CH-1211
Switzerland
+41 22 705 8273 (Phone)
+41 22 705 8293 (Fax)

HOME PAGE: http://www.unige.ch/ses/ecopo/demelo/Jaime.html

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

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