Abstract

In my research I have investigated the impact of trade on the Environmental Kuznets Curve (EKC). I investigate the impact on the level and curvature of the EKC by varying the degree of export and import.
In my first paper, I have revisited the Andreoni and Levinson (2001) model in the presence of trade. In their original work, they conclude that the desired relationship between pollution and income can be traced only when there exists increasing returns to abatement technology. I have built upon the model by introducing trade and heterogeneity in abatement technology. I conclude when pollution sources from production and countries engage in trade, increasing returns to abatement technology no longer remains a necessary condition for a country to experience the EKC. When countries experience CRS or DRS, engaging in trade with countries with IRS enables them to attain the EKC. This however is possible only in the case of transboundary pollutants.
For my second paper, I look at the impact of trade on the multi-country framework of EKC developed by Diamantoudi and Filippiadis (2010). Introducing trade shows that pollution dependence among countries can exist even when the nature of pollutants is local in addition to the case of global pollutants. Results show that the impact of trade is more favorable for local pollutants both for the shape of the EKC and the scope for pollution substitution.
My third paper is an extension of my second paper where I investigate the impact of trade on the multi-country framework when technology is heterogeneous. When countries of different levels of technology engage in trade with each other, it is found that the relative level of technology has an impact on the scope of pollution substitution as well as the EKC. Results of this paper reveal that when the level of technology of the foreign country is better, engaging in imports, and when the level of technology of the home country is better, engaging in exports helps the scope of pollution substitution as well as the shape of EKC.