Abstract: The Basel Convention regulates waste trade between its members and imposes stringent restrictions on waste trade between members and non-members. The trade club feature is quantitatively important and serves as an important accelerator of the Convention's effect on global waste trade: Its impact in the mid-1990's, when approximately half the countries are members, is equivalent to at least 35% of the treaty's entire effect in that year, and at least one fourth of the treaty's entire effect when membership becomes nearly universal by the end of 2010's. Under some specifications, we cannot reject the possibility that the entire trade effect of Basel is driven by these exclusionary restrictions. We also find substantial heterogeneity in the effects on inter-regional trade, with the largest effects on OECD to Non-OECD trade and intra Non-OECD trade. Our findings have implications for the efficacy of trade clubs in facilitating the formation of international environmental agreements.
Abstract: We study how non-tariff measures affect the local environment in a developed country. Using a shift-share design combining data on Technical Barriers to Trade (TBTs) adopted by US' export destinations, bilateral US exports, and counties' industrial composition, we estimate that a 1 s.d. increase in TBT treatment raises reported emissions growth by 0.20, 0.04, and 0.14 s.d. for SO2, PM10, and VOC, respectively. Tariff shocks, which directly restrict trade, have the opposite effect from TBT shocks, which permit market access conditional on compliance with the importing country's standards. Effects are stronger for standards that are newer to US producers, require little market-failure correction, have observable compliance, and are imposed where compliance carries a stronger quality signal. We also uncover dimensions along which TBT treatment decreases regional emissions activity. Our findings show how compliance can perversely raise pollution emissions, implying the need for environmental provisions in trade agreements.
Abstract: Environmental stringency shapes international trade patterns, yet identifying its causal effect remains challenging. With country-year fixed effects in gravity equations, identification relies on restrictive bilateral measures. I combine intra- and inter-national waste flows with an instrumental variables approach to isolate the unilateral effects of environmental stringency. A 1% increase in stringency reduces a country's international relative to domestic waste flows by 6.09%. For a major trading economy, the implied reduction equals about 5% of world waste trade. My findings imply that unilateral increases in environmental stringency can meaningfully reduce global trade in polluting goods.
