Working Paper: CEPR ID: DP9660
Authors: Jaime de Melo
Abstract: This paper discusses the state of knowledge about the trade-related environmental consequences of a country?s development strategy along three channels: (i) direct trade-environment linkages (overexploitation of natural resources and trade-related transport costs);(ii) ?virtual trade? in emissions resulting from production activities; (iii) the product mix attributes of a ?green-growth? strategy (environmentally preferable products and goods for environmental management). Main conclusions are the following. Trade exacerbates over-exploitation of natural resources in weak institutional environments, but there is little evidence that differences in environmental policies across countries has led to significant ?pollution havens?. Trade policies to ?level the playing field? would be ineffective and result in destructive conflicts in the WTO. Lack of progress at the Doha round suggests the need to modify the current system of global policy making.
Keywords: Environmental goods; Green growth; Natural resources; Trade; Climate
JEL Codes: F18; Q56
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| trade (F19) | overexploitation of natural resources (Q32) |
| weak institutional environments (O17) | overexploitation of natural resources (Q32) |
| trade (F19) | environmental degradation (Q53) |
| differences in environmental policies (Q58) | pollution havens (F64) |
| trade policies aimed at leveling the playing field (F13) | destructive conflicts in WTO (F13) |
| lack of progress in global negotiations (F69) | reassessment of global policy frameworks (F68) |