For the last ten years environmentalists and the trade policy community have engaged in a heated debate over the environmental consequences of liberalized trade. The debate was originally fueled by negotiations over the North American Free Trade Agreement and the Uruguay round of GATT negotiations, both of which occurred at a time when concerns over global warming, species extinction and industrial pollution were rising. Recently it has been intensified by the creation of the World Trade Organization (WTO) and proposals for future rounds of trade negotiations. The debate has often been unproductive. It has been hampered by the lack of a common language and also suffered from little recourse to economic theory and empirical evidence. The purpose of this essay is set out what we currently know about the environmental consequences of economic growth and international trade. We critically review both theory and empirical work to answer three basic questions. What do we know about the relationship between international trade, economic growth and the environment? How can this evidence help us evaluate ongoing policy debates? Where do we go from here?

Trade, Growth and the Environment

Towards a structural model of the tourist experience: an illustration from food experiences in tourism.

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Trade, Growth, and the Environment

This paper reviews the literature in order to identify the determinant factors of a company’s environmental proactivity. It starts by arguing that environmental proactivity can be manifested through diverse practices and strategies and goes on to comment upon several variables that seem to influence the decision to implement such strategies. Some of these variables depict internal company features and others describe the general environment in which operations are carried out. Stakeholders’ pressure is distinguished as a central determinant factor and it is argued that all the other variables affect either the intensity of this pressure or the company’s capacity to perceive it. All the factors identified herein should be taken into account, at least as control variables, in those studies aiming at explaining and contextualizing environmental strategies. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.

A review of determinant factors of environmental proactivity

We use theory and empirics to examine the effect of environmental regulations on trade flows. A simple model demonstrates how unobserved heterogeneity, endogeneity, and aggregation issues bias standard measurements of this relationship. A reduced-form estimate of the model, using data on U.S. regulations and trade with Canada and Mexico for 130 manufacturing industries from 1977 to 1986, indicates that industries whose abatement costs increased most experienced the largest increases in net imports. For the average industry, the change in net imports we ascribe to regulatory costs amounting to 10% of the total increase in trade volume over the period.

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Unmasking the pollution haven effect

This study examines the effects of air quality regulation on economic activity. Anecdotal evidence and some recent empirical studies suggest that an inverse relationship exists between the stringency of environmental regulations and new plant formations. Using a unique county-level data set for New York State from 1980 to 1990, we revisit this conjecture using a seminonparametric method based on propensity score matching. Our empirical estimates suggest that pollution-intensive plants are responding to environmental regulations; more importantly, we find that traditional parametric methods used in previous studies may dramatically understate the impact of more stringent regulations.

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Effects of Environmental Regulations on Manufacturing Plant Births: Evidence from a Propensity-Score-Matching Estimator

Effects of environmental regulation on foreign and domestic plant births: is there a home field advantage?

Whether lax environmental regulations are an important attraction for mobile capital remains one of the most controversial issues in the area of regulatory federalism. While the extant literature does a nice job of estimating the effects of environmental regulation on the spatial allocation of new plant births, one neglected area of research is the effect that environmental regulation has on plant relocation decisions. This paper uses an annual (1980--90) county level panel data set to examine the relationship between air quality regulatory stringency and the destination choice of relocating plants. We estimate empirical models using both parametric and semi-nonparametric specifications. Empirical results from both models suggest that air quality regulations alter significantly the destination choices of relocating plants. Copyright 2003, Oxford University Press.

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Effects of air quality regulation on the destination choice of relocating plants

The Clean Air Act and its subsequent amendments have been lauded as the primary stimulant to the impressive improvement in local air quality in the US since 1970. A key component of these regulations is the New Source Review (NSR) requirement, which includes the contentious stipulation that when an existing plant seeks to modify its operations, the entire plant must comply with current standards for new sources. This requirement was included to improve air quality in dirty areas, and prevent a deterioration of air quality in clean areas. Yet, whether NSR provides the proper plant-level incentives is unclear: there are strong disincentives to undertake major plant modifications to avoid NSR. In our examination of more than 2500 and 2200 plant-level modification decisions and closures, respectively, we find empirical evidence suggesting that NSR retards modification rates, while doing little to hasten the closure of existing dirty plants.

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The Unintended Disincentive in the Clean Air Act

Assessing the revenue generation and other economic influences of a one-time megaevent raises unique measurement problems. This is especially true when the event is a “cultural” tourist activity held in a place where many “casual” tourists flock. This article describes this delineation process and presents the basis for encouragement of cultural tourist events.

W. Warren McHone

Papers

Effects of Environmental Regulations on Manufacturing Plant Births: Evidence from a Propensity-Score-Matching Estimator

Effects of environmental regulation on foreign and domestic plant births: is there a home field advantage?

Effects of air quality regulation on the destination choice of relocating plants

The Unintended Disincentive in the Clean Air Act

Practical Issues in Measuring the Impact of a Cultural Tourist Event in a Major Tourist Destination