Trade and the environment: an empirical analysis


The project aims at providing orders of magnitude regarding the relationship between trade and polluting emissions at the world-wide level. Overall, the obtained results suggest that trade is not necessarily bad for the environment. One reason to worry is that differences in environmental regulations seem to motivate dirty production to locate in countries with weak environmental standards (usually poor countries). However, this effect is often more than counterbalanced by the opposite force arising from the fact that dirty goods are capital-intensive, which provides a comparative advantage to capital-rich countries, where environmental standards are high. Regarding SO2 emissions, it is shown that trade contributed, although modestly, to the recent decline in global emissions by allowing, on average, the cleanest countries to specialize in the production of dirty goods. Finally, CO2 per capita emissions, which diverge between countries at the global level, tend to converge within members of preferential trade areas, although the precise role of trade in this context has still to be clarified.

Personnes et institutions

Principal applicant Co-applicant PhD. students
Prof. Jean-Marie Grether
Institut de recherche économiques
Université de Neuchâtel

Prof. Jaime de Melo
Département d'économie politique
Université de Genève

Prof. Laurent Viguier

Lab. of Environment. manag. and Economics
School of Architecture, Civil and
Environmental Engineering (ENAC)




1. Grether, J.-M., N.A. Mathys and J. de Melo (2006), "Unravelling the World-Wide Pollution Haven Effect", CEPR discussion paper No 5815.

2. Grether, J.-M., N.A. Mathys and J. de Melo (2006), "Is trade bad for the environment? Decomposing world-wide SO2 emissions 1990-2000", University of Neuchâtel .

3. Grether J.-M. and C. Ordas (2006), "Trade and convergence in CO2 emissions: some preliminary evidence", University of Neuchâtel

Résumé des trois cahiers ci-dessus (en anglais).