Trade and the Environment

Copeland, Brian R.

doi:10.1007/978-0-230-30531-1_15

Cited by 54 publications

(5 citation statements)

References 146 publications

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“…Specifically, the results indicate that a 1% increase in FDI leads to a 0.412%, 0.071%, and 0.081% increase in CO 2 emissions in pooled OLS, fixed effect, and random effect models, respectively. These findings support the pollution haven theory, which suggests that polluting industries relocate to less developed countries with lax environmental regulations (Copeland, 2013). The study argues that the West African region has become a pollution haven due to its comparative advantage in export and production, resulting in severe environmental degradation.…”

Section: Resultssupporting

confidence: 77%

“…As a result, the ECOWAS region has become a pollution haven for one of the heavily polluting regions due to the deteriorated effect of FDI on the environment. This supports the pollution haven theory for the West African region and also supports Copeland's (2013) hypothesis, which suggests that polluting firms relocate to developing countries to transfer pollution problems from developed countries to developing ones, leading to significant environmental degradation in these developing countries. The study found that the reduction in CO 2 emissions in the ECOWAS region was significantly attributed to energy consumption, especially of renewable energy, particularly solar energy, which replaced non‐renewable energy sources.…”

Section: Conclusion and Policy Implicationssupporting

confidence: 83%

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Exploring the potential environmental impact of the recently established African continental free trade agreement on ECOWAS members' nations

Ibrahim,

Wang,

Cudjoe

et al. 2023

Bus Strat Dev

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This research aims to comprehensively analyze the potential environmental impact of the African Continental Free Trade Agreement (AfCFTA) in Economic Community of West African States (ECOWAS) countries. To achieve this, a two‐model approach is employed, consisting of a fixed and random effects model covering the period of 1990 to 2021 and a difference‐in‐differences (DID) model focusing on the period of 2014 to 2021. The fixed and random effects model provides insights into long‐term trends and country‐specific effects, while the DID model assesses short‐term changes and estimates causal relationship effects of the AfCFTA by comparing changes in environmental indicators before and after the AfCFTA establishment. Our conclusion is based on the random effect, which was determined to be more appropriate following the Hausman diagnostic test and the DID results. The random effect model results show that GDP increases environmental degradation, whereas GDP squared improves environmental quality. Trade openness and energy consumption improve the region's environmental quality, while foreign direct investment inflows damage the environment. The DID results indicate that the treatment variable (establishment of AfCFTA) has the potential of worsening the environment while the control variable (ECOWAS member) has the potential of improving environmental quality. The interaction variable (treatment × control) enhances environmental quality. The study suggests that the trade agreement has the potential to contribute to sustainable development and environmental protection. Policymakers should seize this opportunity by implementing environmental safeguards, promoting sustainable trade practices, fostering regional collaboration, and ensuring effective monitoring and evaluation mechanisms.

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Section: Resultssupporting

confidence: 77%

Section: Conclusion and Policy Implicationssupporting

confidence: 83%

Exploring the potential environmental impact of the recently established African continental free trade agreement on ECOWAS members' nations

Ibrahim,

Wang,

Cudjoe

et al. 2023

Bus Strat Dev

View full text Add to dashboard Cite

show abstract

“…Also note that part (ii) of Proposition 1 implies that countries may respond to tariff liberalization by deregulating their own firms. Such a race‐to‐the‐bottom outcome has been established in the trade and environment literature which primarily focuses on negative production externalities (e.g., Copeland, 2011). Here we show that the deregulation on domestic firms following tariff reductions can also take place under consumption externalities.…”

Section: Endogenous Standards and Exogenous Tariffsmentioning

confidence: 97%

Tariffs, product standards, and national treatment at the WTO

Geng

2024

Economic Inquiry

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This paper develops an oligopolistic model with consumption externalities to study (i) the policy interaction between tariffs and product standards; (ii) how such interaction may affect the welfare justification of national treatment (NT) in product standards. Absent NT, tariff reductions can lead to more discriminatory standards against foreign firms. Imposing NT eliminates discrimination but can induce higher tariffs which tend to undermine efficiency. As a result, the welfare justification of NT is stronger when tariffs are constrained. These findings suggest that the World Trade Organization's success in tariff liberalization can strengthen the case for its NT‐based approach to product standards.

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“…This section delves into various theoretical approaches to elucidate the relationship between international trade and the environment. Three main channels, namely the scale effect, composition effect, and technique effect, have been identified as mechanisms through which trade can impact the environment (Copeland & Taylor, 2013). The scale effect suggests that trade liberalization and increased economic activity could lead to a larger production scale, potentially exerting additional strain on the environment (Le et al, 2016).…”

Section: Unveiling the Green Impact: Exploring The Nexus Between Trad...mentioning

confidence: 99%

“…The scale effect suggests that trade liberalization and increased economic activity could lead to a larger production scale, potentially exerting additional strain on the environment (Le et al, 2016). The composition effect focuses on shifts in production between countries, where developing nations might concentrate on manufacturing polluting goods due to lax environmental regulations, while developed countries prioritize cleaner production (Le et al, 2016;Copeland & Taylor, 2013). The technique effect evaluates adopting more ecologically sustainable manufacturing practices in response to market and institutional incentives (Vilas-Ghiso & Liverman, 2006).…”

Section: Unveiling the Green Impact: Exploring The Nexus Between Trad...mentioning

confidence: 99%

Unveiling the Green Impact: Exploring the Nexus Between Trade Openness and Environmental Quality in South Africa

DINGISWAYO,

SIBANDA,

DUBIHLELA

2023

IJESSS

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In light of the escalating concerns about environmental sustainability and the profound impact of international trade on environmental outcomes, the study's focal point was to empirically investigate the relationship between trade openness and environmental quality in South Africa from 1994 to 2018. In order to achieve the goal, the research utilized the Autoregressive Distributed Lag (ARDL) Bounds method and Granger causality test for analyzing data. The ARDL Bounds approach was chosen for its ability to examine both short-run and long-run relationships, while the Granger causality test provided insights into the direction of causality between the variables. This combination of robust econometric techniques enhances the reliability and depth of the study's findings, leading to a more comprehensive understanding of the complex relationship between trade openness and environmental quality in the country. The analysis results revealed a significant and positive relationship between trade openness and carbon emissions in the short and long run. The Granger causality test also indicated a unidirectional causality from trade openness to environmental quality. These implications are paramount for the South African government's policy formulation. In order to tackle the environmental issues that come with open trade, the government must put in place trade agreements that will enhance its ability to address these concerns efficiently. One crucial step is reducing trade barriers on environmental goods, facilitating increased access to green technologies at lower costs. Moreover, the government should prioritize enacting and enforcing strict environmental laws to avoid the "pollution haven hypothesis," which often affects low-income countries.

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Trade and the Environment

Cited by 54 publications

References 146 publications

Exploring the potential environmental impact of the recently established African continental free trade agreement on ECOWAS members' nations

Exploring the potential environmental impact of the recently established African continental free trade agreement on ECOWAS members' nations

Tariffs, product standards, and national treatment at the WTO

Unveiling the Green Impact: Exploring the Nexus Between Trade Openness and Environmental Quality in South Africa

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