Pollution Havens and the Trade in Toxic Chemicals: Evidence from U.S. Trade Flows

26 Pages Posted: 19 Jun 2010

See all articles by John P. Tang

John P. Tang

ANU Research School of Economics

Date Written: June 1, 2010

Abstract

Does increased environmental protection decrease the emission of pollutants or merely displace them? Using newly available trade data, this study examines the flows of a panel of chemicals designated as toxic by the U.S. Environmental Protection Agency’s Toxics Release Inventory (TRI). Estimates from a differences-in-differences model indicate a significant increase in net imports when a chemical is listed on TRI, which suggests production off-shoring. Furthermore, I find that increased imports due to this “pollution haven effect” are sourced disproportionately from poorer countries, which are likely to have lower environmental protection standards. At the same time, I observe the bulk of American trade in toxic chemicals occurs with other wealthy countries, which may be attributed to the capital intensity of chemical production.

Suggested Citation

Tang, John P., Pollution Havens and the Trade in Toxic Chemicals: Evidence from U.S. Trade Flows (June 1, 2010). US Census Bureau Center for Economic Studies Paper No. CES-WP- 10-12, Available at SSRN: https://ssrn.com/abstract=1625282 or http://dx.doi.org/10.2139/ssrn.1625282

John P. Tang (Contact Author)

ANU Research School of Economics ( email )

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Canberra, Australian Capital Territory 0200
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