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Poor countries suffer from serious environmental damage, & much more pollution control is justifiable. Weak regulation is partly to blame, but the evidence suggests that it reflects a general development problem, not deliberate creation of "pollution havens" to promote investment & trade. Aid from the OECD countries can help reduce pollution in poor countries by promoting better public information about polluters, stronger regulatory institutions, & more explicit attention to environmental risks in large projects. However, attempts to enforce OECD-level regulatory standards through general trade & aid sanctions are both regressive & useless: regressive because they penalize workers in poor countries by reducing opportunities for jobs & higher wages; useless because governments of low-income countries cannot deliver on promises of OECD-level regulation, even if they wish to do so. 42 References. Adapted from the source document.

Poor countries suffer from serious environmental damage, and much more pollution control is justifiable. Weak regulation is partly to blame, but the evidence suggests that it reflects a general development problem, not deliberate creation of "pollution havens" to promote investment and trade. Aid from the OECD countries can help reduce pollution in poor countries by promoting better public information about polluters, stronger regulatory institutions, and more explicit attention to environmental risks in large projects. However, attempts to enforce OECD-level regulatory standards through general trade and aid sanctions are both regressive and useless: regressive because they penalize workers in poor countries by reducing opportunities for jobs and higher wages; useless because governments of low-income countries can not deliver on promises of OECD-level regulation, even if they wish to do so.

The "Pollution Haven Hypothesis" (PHH) is one of the most hotly debated predictions in all of international economics. This paper explains the theory behind the PHH by dividing the hypothesis into a series of logical steps linking assumptions on exogenous country characteristics to predictions on trade flows and pollution levels. I then discuss recent theoretical and empirical contributions investigating the PHH to show how each contribution either questions the logical inevitability, or the empirical significance of one or more steps in the pollution haven chain of logic. Suggestions for future research are also provided.

A pollution haven may arise if environmental stringency differs between countries, when capital is mobile, and when trade rules allow firms to relocate and still sell their products to the same customers. This cohesive volume analyzes how country characteristics determine environmental rules, how those rules affect production costs, trade, and investment flows, how those flows affect pollution, prices, and incomes, and finally how all of these last considerations feed back into environmental rules. The sixteen papers collected here represent the most recent and significant advancements of knowledge on the subject. The contributors, all well-known scholars in the area, investigate how polluter location decisions respond to pollution policies, how local environmental rules respond to those location decisions, and how trade liberalization affects the incentives of governments to regulate dirty industries. The volume begins with a comprehensive overview by M. Scott Taylor and goes on to explore how the usual effects of pollution havens can be reversed. Also covered are the ways in which managed trade and trade liberalization, the regulation of multinationals, political stability and emissions controls impact pollution havens. Written for a multidisciplinary audience, The Economics of Pollution Havens will be of interest to those working in the areas of economics, international trade, political science, public policy, and environmental studies

U.S. Presidential Executive Order 13141 commits the United States to a careful assessment and consideration of the environmental impacts of trade agreements. The most direct mechanism through which trade liberalization would affect environmental quality in the U.S. is through the composition of industries. Freer trade means greater specialization, increasing the concentration of polluting industries in some countries and decreasing it in others. We begin by documenting the substantial shift in U.S. manufacturing toward cleaner industries from 1972 to 1994. We then use annual industry-level data on imports to the U.S. to examine whether this compositional shift can be traced to the significant trade liberalization that occurred over the same time period, and we conclude that no such connection exists. A shift toward cleaner industries has also occurred among U.S. imports, and we find no evidence that pollution-intensive industries have been disproportionately affected by the tariff changes.

Whether or not pollution havens exist in poor countries has been the subject of a great deal of debate in recent decades. This concern is warranted, as the intensity of dirty industry is rising in the developing world just as it is falling in the industrialized world. But identifying pollution havens is extremely difficult in practice. Part of the reason for this is that there are important flaws with the methods & measures used in the pollution havens literature, which results in an overly narrow debate. It may be time to abandon the narrowly constructed pollution havens debate in favor of a more open-ended analysis of the linkages between global trade & investment & environmental regulation. 28 References. Adapted from the source document.

The "Pollution Haven Hypothesis" is the prediction that trade liberalization will lead to the movement of polluting industries from high income/stringent environmental regulation countries to low income/lax environmental regulation countries. This prediction has led to concerns that NAFTA would be an environmental disaster for Mexico. The three articles included in this collection investigate the post‐NAFTA environmental performance of Mexico using both aggregate data on pollution emissions as well as firm‐level data on environmental abatement efforts. In this article, I summarize the contribution in the context of the trade/environmental literature and provide some suggestions for future work.

Whether or not pollution havens exist in poor countries has been the subject of a great deal of debate in recent decades. This concern is warranted, as the intensity of dirty industry is rising in the developing world just as it is falling in the industrialized world. But identifying pollution havens is extremely difficult in practice. Part of the reason for this is that there are important flaws with the methods and measures used in the pollution havens literature which results in an overly narrow debate. It may be time to abandon the narrowly constructed pollution havens debate in favor of a more open-ended analysis of the linkages between global trade and investment and environmental regulation.