Globalization and Environment: Can Pollution Haven Hypothesis alone explain the impact of Globalization on Environment?

Dinda, Soumyananda (2006): Globalization and Environment: Can Pollution Haven Hypothesis alone explain the impact of Globalization on Environment?

Abstract

The economic literature on trade and environment seeks empirically test hypotheses about how trade affects the environment that is crucial for resolving current policy debates. Applying panel data technique we examine the impacts of globalization on pollution level, pollution intensity and relative change of pollution for the developed (OECD) and developing (Non-OECD) country groups and the world as a whole. This paper examines the factor endowment and pollution haven hypotheses that predict how trade affects the environment. Interaction effects also play a crucial role to determine the impact of globalization on environment. In this study we use CO2 emission and observe that the impact of globalization on environment heavily depends on the basic characteristics of a country and its dominating comparative advantage. The empirical results suggest that globalization increases CO2 emission, which is the main culprit of the global warming.

• Item Type: MPRA Paper
• Language: English
• Keywords: Globalization, pollution haven hypothesis, factor endowment hypothesis, and interaction effect
• Subjects: F - International Economics > F1 - Trade > F12 - Models of Trade with Imperfect Competition and Scale Economies ; Fragmentation; F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade; F - International Economics > F1 - Trade > F18 - Trade and Environment; F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment ; Long-Term Capital Movements; F - International Economics > F6 - Economic Impacts of Globalization > F63 - Economic Development; F - International Economics > F6 - Economic Impacts of Globalization > F64 - Environment; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q0 - General; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q3 - Nonrenewable Resources and Conservation; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q3 - Nonrenewable Resources and Conservation > Q34 - Natural Resources and Domestic and International Conflicts; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q53 - Air Pollution ; Water Pollution ; Noise ; Hazardous Waste ; Solid Waste ; Recycling; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q54 - Climate ; Natural Disasters and Their Management ; Global Warming; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q56 - Environment and Development ; Environment and Trade ; Sustainability ; Environmental Accounts and Accounting ; Environmental Equity ; Population Growth

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