International Trade Intensity and Carbon Emissions: A Cross-Country Econometric Analysis

Abstract

This article explores the appropriate specification of cross-country econometric analyses of international trade and pollution using data on carbon emissions across 132 countries from 1950 to 1992. A number of prominent studies implicitly rule out pollution shifting across countries by not interacting trade measures with income. Using a more flexible functional form, it is shown in this article that increased trade intensity raises carbon emissions in lower income countries and lowers carbon emissions in upper income countries.