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Exploring Trade & the Environment

Exploring Trade & the Environment

An Empirical Examination of Trade Openness and National Environmental Performance

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.

The project was funded by the FedEx Company and conducted under the leadership of researchers from the Center for Environmental Law & Policy and the Statistics Department at Yale University.


Emerson, John W.; Daniel C. Esty; Tanja Srebotnjak and Diana Connett 2011: Exploring Trade and the Environment: An Empirical Examination of Trade Openness and National Environmental Performance. Center for Environmental Law & Policy, Yale University, New Haven, CT.

John W. Emerson
Daniel C. Esty
Diana Connett
50 pp.
Table of Contents

Executive Summary

1. Existing Theories of Trade and the Environment
2. Study Methodology
2.1 Data Sources
2.2 Data Exploration
3. Results
3.1 Adding Nuance to the Trade–Environment Relationship
3.2 Trade Policy Effects and Environmental Performance
3.3 Trade Flows and Environmental Performance
3.4 Trade and Climate Change
3.5 Fossil Fuel Subsidies
3.6 Foreign Direct Investment and Expenditures on Information and Communication
3.7 Technology
4. Trade Trends and Climate Change
5. Future Research
6. Data Profiles
7. References

trade, environmental performance, trade openness, trade intensity, climate change, environmental health, ecosystem degradation, globalization, global