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How to address the link between environmental regulation and trade was an important part of discussions at the World Trade Organization Ministerial in Doha, Qatar in November 2001. Trade ministers agreed to launch negotiations on trade and the environment, specifically clarification of WTO rules.Wilson, Otsuki, and Sewadeh address an important part of the background context for deciding whether or how to link trade agreements to the environment from a developing country perspective. The authors ask whether environmental regulations affect exports of pollution-intensive or quot;dirtyquot; goods in 24 countries between 1994 and 1998. Based on a Heckscher-Ohlin-Vanek (HOV) model, net exports in five pollution-intensive industries are regressed on factor endowments and measures of environmental standards (legislation in force). The results suggest that, if country heterogeneity such as enforcement of environmental regulations is controlled for, more stringent environmental standards imply lower net exports of metal mining, nonferrous metals, iron, and steel and chemicals. The authors find that a trade agreement on a common environmental standard will cost a non-OECD country substantially more than an OECD country. Developing countries will, on average, reduce exports of the five pollution-intensive products by 0.37 percent of GNP. This represents 11 percent of annual exports of these products from the 24 studied countries.This paper - a product of Trade, Development Research Group - is part of a larger effort in the group to explore the link between standards, development, and trade. The authors may be contacted at [email protected], [email protected], or [email protected].
Handbook on Trade and the Environment is a good source for those looking for a better understanding of political issues, of legal debates, and of the state of discussion between government, industry, NGO, and private sector groups on topics that are not often treated elsewhere. Judith M. Dean, World Trade Review I would recommend the book to anyone concerned with the interaction of trade and the environment. John Goodier, Reference Reviews In this comprehensive reference work, Kevin Gallagher has compiled a fresh and broad-ranging collection of expert voices commenting on the interdisciplinary field of trade and the environment. For over two decades policymakers and scholars have been struggling to understand the relationship between international trade in a globalizing world and its effects on the natural environment. The authors in this Handbook provide the tools to do just that. The editor s well-worked introduction synthesizes the emerging themes of the collection, which is divided into three sections: trade and environmental quality, trade and environmental politics, and trade and environmental policy. Topics include the extent to which trade liberalization creates pollution havens where dirty industries flock to poorer countries with lax environmental standards, and conversely, how multinational corporations bring cleaner environmental technologies to developing countries when they choose to move abroad. The volume also addresses the extent to which national environmental policy and/or global environmental agreements clash with the emerging rules of the World Trade Organization and whether such environmental policies hinder export competitiveness. Finally, numerous political economy analyses of the complex political coalitions that arise to adapt to and mitigate changes in trade and environmental policy are provided. In addition to broader overviews of the field, in-depth case studies of nations and regions are offered, including the United States, the European Union, China, India and Mexico as well East Asia, Latin America, and Africa. The volume will serve as a guide for scholars new to the field as well as students and policy-makers needing a quick reference to the research on the interface between trade and the environment.
The "pollution haven" hypothesis states that multinational firms, particularly those in highly polluting industries, relocate to countries with weak environmental standards. Despite the plausibility and popularity of this hypothesis, Smarzynska and Wei find only weak evidence in its favor.
This paper reviews arguments and evidence on the impact of globalization on the environment, then presents evidence on production and international trade flows in five heavily polluting industries for 52 countries over the period 1981-98. A new decomposition of revealed comparative advantage (RCA) according to geographical origin reveals a delocalization to the South for all heavily polluting industries except non-ferrous metals that exhibits South-North delocalization in accordance with factor-abundance driven response to a reduction in trade barriers. Panel estimation of a gravity model of bilateral trade on the same data set reveals that, on average, polluting industries have higher barriers-to-trade costs (except non-ferrous metals with significantly lower barriers to trade) and little evidence of delocalization in response to a North-South regulatory gap.
The first book to comprehensively analyze the regulation of dirty industry migration - a global issue that has complex economic, environmental and social implications. The book examines the mechanisms of regulation of dirty industry migration under internal trade, investment, environment and human rights laws. Other than international law, the host and home country regulation of dirty industry migration in the context of domestic laws and policies are examined. Finally, this book critically evaluates the voluntary codes relating to corporate environmental citizenship and social responsibility which bear implications on the regulation of dirty industry migration. - Based on detailed and up-to-date research
Featuring an original introduction by the editors, this important collection of essays explores the main issues surrounding the regulation of the environment. The expert contributors illustrate that regulating the environment in the UK is conceptually complex, involves a diverse range of institutions, techniques and methodologies and crosses geographical and national boundaries. In the USA it is more formalised, juridical, adversarial and formally dependent upon legal rules. The articles highlight the fact that despite differences in the UK and the USA's regulatory styles, environmental regulation today has much in common with both traditions.