Trade liberalization and environment quality: evidence from the Philippines
Date
2007-03
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Abstract
This paper rums at investigating the impact of trade liberalization on environmental quality in the Philippines. Environmental quality is measured in terms of carbon dioxide emissions. Time-series variation reveals that trade openness is positively related to higher C02 emissions. This paper further decomposes the impact of trade liberalization on three effects- scale, composition and technique effects. Results indicate that scalar increases in economic activity raise C02 emissions. Increasing capital to labor ratio increases C02 emissions. Also rising income per capita raises C02 emissions. Freer trade appears to be bad for the environment.
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Keywords
Trade, Trade liberalization, Environmental quality, International trade, Sustainable development, Economic policy