Trade and the Environment: Theory and Evidence

Description

Nowhere has the divide between advocates and critics of globalization been more striking than in debates over free trade and the environment. And yet the literature on the subject is high on rhetoric and low on results. This book is the first to systematically investigate the subject using both economic theory and empirical analysis. Brian Copeland and Scott Taylor establish a powerful theoretical framework for examining the impact of international trade on local pollution levels, and use it to offer a uniquely integrated treatment of the links between economic growth, liberalized trade, and the environment. The results will surprise many. The authors set out the two leading theories linking international trade to environmental outcomes, develop the empirical implications, and examine their validity using data on measured sulfur dioxide concentrations from over 100 cities worldwide during the period from 1971 to 1986. The empirical results are provocative. For an average country in the sample, free trade is good for the environment. There is little evidence that developing countries will specialize in pollution-intensive products with further trade. In fact, the results suggest just the opposite: free trade will shift pollution-intensive goods production from poor countries with lax regulation to rich countries with tight regulation, thereby lowering world pollution. The results also suggest that pollution declines amid economic growth fueled by economy-wide technological progress but rises when growth is fueled by capital accumulation alone. Lucidly argued and authoritatively written, this book will provide students and researchers of international trade and environmental economics a more reliable way of thinking about this contentious issue, and the methodological tools with which to do so.

Brian R. Copeland and M. Scott Taylor have coauthored numerous articles on trade and the environment in a variety of prominent journals. Copeland is Professor of Economics at the University of British Columbia. Taylor is Canada Research Chair in International, Energy, and Environmental Economics at the University of Calgary and a Research Associate at the National Bureau of Economic Research.

Winner of the 2004 Doug Purvis Memorial Prize, Canadian Economics Association "Copeland and Taylor have opened the way to a better dialogue between economists and environmentalists. Their book will surely take its place on the shelves of trade economists and environmentalists."--James Anderson, Journal of International Economics "[A] well-written book... As Copeland and Taylor make clear, there is a good deal of scope for additional research on the topic of trade and environment, and this book provides a great starting point for such research."--Josh Ederington, World Trade Review "This book is systematically developed and well presented."--Richard N. Cooper, Environment "This book takes 'trade and the environment' from toddling to a brisk walk and indicates that it has come of age as a subfield... [It] strives, very successfully, to link its theory to empirical work."--Martin Richardson, Economic Record