CREDIT Seminar: Maite Alguacil (University Jaume I, Institute of International Economics)

Speaker:  Maite Alguacil  (University Jaume I, Institute of International Economics)

Title:  Environmental Stringency and International Trade (with Bojan Shimbov and Inmaculada Martinez- Zarzoso)

Abstract: This paper presents a novel analysis of the impact of environmental regulations aimed at reducing carbon dioxide (CO2) emissions on international trade in goods. Using a panel dataset from OECD and BRIC countries from 2007 to 2019, we estimate gravity models, controlling for potential confounding factors and addressing endogeneity issues. Our empirical analysis integrates emissions intensity data with detailed international trade information at the industry level, considering both market-based and non-market-based environmental policies. We examine both aggregate and sectoral models, distinguishing between clean and dirty industries, and industries with varying levels of mobility. Covering countries that account for over 80% of global human-induced CO2 emissions and are key targets of decarbonization policies, our findings indicate that stricter environmental regulations negatively impact export performance, especially in highly polluting industries and high-income economies.