Exploring Trade & the Environment
This study investigates the prevailing theories about the effect of trade openness on environmental quality and resource management, providing new insights and empirical support to refute some of these theories. It builds on data collected through the Yale-Columbia 2010 Environmental Performance Index (EPI), which covers 163 countries and an extensive database of trade-related measures from academic and international sources. Senior fellow Tanja Srebotnjak contributed statistical analyses to the study. It is available for download.
The study [pdf, 750 kB, English] shows that decision-making needs to move beyond the broad definitions of trade-openness and environmental performance and instead recognize the importance of a more refined interplay between international trade flows, liberalization policies, good governance and disaggregated environmental factors such as environmental health, ecosystem degradation and climate change. It finds evidence that trade openness and economic growth can have both positive and negative empirical environmental associations.