How international

trade affects
pollution?

Student: Molnar Abigail Eniko

University of Ioannina
International trade
Professor: ΝΙΚΟΛΑΟΣ ΤΣΑΚΙΡΗΣ
Contents
1.Introduction..............................................................................................................................................3
2.International trade and pollution.............................................................................................................3
3.Conclusion................................................................................................................................................6
4.References................................................................................................................................................7
5.Appendix..................................................................................................................................................8
How the international trade affects pollution?
1.Introduction

The main reason why i want to analyze that topic is because we can see that the pollution
is everywhere where we go, in each country, in each city. The pollution is not good and we can
see how the climate is changing, the water, the air. I want to see how international trade affects
pollution.

The paper “New evidence on trade-environment linkage via air visibility” that shows that
trade liberalization increase pollution.

“Is Free Trade Good for the Environment?” and “Trade liberalization and the environment:
Evidence from NAFTA and U.S. manufacturing” show that trade liberalization reduce pollution
and make relatively small changes.

How trade liberalization is affects the environment, in which ways it affects it?

2.International trade and pollution

The paper “Is Free Trade Good for the Environment?” shows that trade is good for the
environment.

The pollution haven hypothesis shows that trade liberalization will induce the dirty
production to poor countries that the viramental regulation is very low.

Pollution haven hypothesis that shows that trade liberalization shows that probably will not be

Because As the dirty production move to poorer countries this means that the poorer countries
will become richer as a result that the economical activity increases in poorer countries so the
income will increase and as a result people will demand for stricter environmental regulation
because higher income means higher demand for cleaner environment. In other hand richer
countries will become more cleaner due to trade. As a result there is two different effects.

The paper “Is Free Trade Good for the Environment?” shows that trade is good for the
environment. The “Kuznets curve” interpreted by Grossman and Krueger it`s contradicting the
pollution haven hypothesis which mean that in one hand trade liberalization will induce pollution
haven hypothesis in another hand there is another thing that shows that trade liberalization
increases income so people with higher income will ask for a cleaner environment so pollution
haven hypothesis is mitigated the environmental “Kuznets curve” approach because Trade
liberalization will increase also income and people will ask for a cleaner environment because
environment is a normal good (if your income increases then you will increase demand for this
good).

In microeconomics the main feature of the normal good is this positive relationship between
income and demand if your income increase actually you will increase your demand for traveling
for example.[1]

Aproaches.

“Kuznets curve”

Sapiro and Walker(2016) finds out that NAFTA is good for environment, “trade liberalization
following NAFTA played an important role in the clean-up of the U.S. manufacturing sector” [3,
pg 2] The result of the research shows that there is no evidence that trade effects on plant
pollution emission(PM10-particular matter and SO2- sulfuric dioxide). NAFTA is reducing
signifficand the emission of PM10 and SO2 from the affected plants.

3.Conclusion
In conclusion, International trade makes relatively small changes in pollution
concentrations when it changes the composition of domestic production. Trade-induced technical
estimates and scale effects imply a net reduction in pollution from these sources. All three effects
produce: freer trade seems good for the environment. Trade liberalization has led to significant
reductions in these affected pollutants. On average, almost two-thirds of the reductions in PM10
and SO2 emissions from the US manufacturing sector can be attributed to trade liberalization
following NAFTA. Negative impact of trade opening on air quality, not only for developing
economies, but also for developed ones. Negative externality should be taken into account by
policy makers before optimizing a policy of globalization.

4.References
1.” Is Free Trade Good for the Environment?” By WERNER ANTWEILER, BRIAN R.
COPELAND, AND M. ScoTr TAYLOR

2. “New evidence on trade-environment linkage via air visibility” Economics letters 128 (2015)
72-74

3. “Trade liberalization and the environment: Evidence from NAFTA and U.S. manufacturing”
Department of Marketing, Business Economics & Law, Alberta School of Business, University
of Alberta, 3-23 Business Building, Edmonton, Alberta T6G 2R6, Canada

4.

https://www.aqi.in/blog/here-are-the-10-main-causes-of-air-pollution/

https://www.sciencedirect.com/science/article/pii/B9780128190012000218
5.Appendix

Figure 1.