The Environmental Kuznets Curves and pollution havens: A study of environmental regulations, trade, and development

Over the last thirty years there has been an increase in global economic growth and development, and international trade. Developed nations such as the United States and the European Union (EU) economies have expanded, at the same time lesser developed countries (LDC's), have also experienced increases in economic growth and development. The purpose of this dissertation is to examine the impact that economic growth and development and international trade have had on the environment.; The first study examines the Environmental Kuznets Curve (EKC). The EKC claims that the relationship between environmental quality and economic development takes on an inverted U-shaped relationship. In our study the environmental quality indicator is carbon dioxide emissions while the economic development indicate is per capita gross domestic production (GDP). The relationship between economic development and carbon dioxide emissions is estimated using a cubic function of per capita GDP, year and country fixed effects. The sample includes 130 countries from 1960 to 1999. Our results indicate that a stable robust EKC for carbon dioxide emissions exists, with a peak at approximately {dollar}24,000 (1996 {dollar}) per capita income, a relatively high level of development. Due to the time span of our data set we are also able to show that the EKC for carbon dioxide shifts downward over time.; The second study determines whether the formation of the European Union has fostered the development of pollution havens. A pollution haven occurs when dirty industries from developed nations relocate to a developing nation in order to avoid strict environmental standards. Our study examines the impact of industry dirtiness, measured by an energy index and a Toxic Release Inventory (TRI) index, on imports into the EU, at the 2-digit industry level from 1970 to 1999. The exporting countries are split into several groups and we perform each of the following estimations: OECD versus non-OECD countries; low income versus high income countries, and a regional analysis, to determine where the EU imports dirty goods from. The results indicate that during periods of greater environmental stringency the EU has increased its dirty imports from poorer, non-democratic regions.