Does trade liberalization induce more greenhouse gas emissions? The case of Mexico and the United States under NAFTA.

摘要

Considering the increasing concerns over greenhouse gas (GHG) emissions and the continuing debates regarding the impact of trade liberalization on the environment, this study provides an ex post analysis of the impact of expanding trade openness between the USA and Mexico on GHG emissions in both countries after NAFTA's passage. Applying an ECM analysis to the most updated GHG emissions data, the findings suggest that trade openness between the USA and Mexico contributes to additional increases in GHG emissions in both countries after 1994. The expanding trade accounts for the majority of the changes in Mexico's GHG emissions, while the impact of US and Mexican trade on unpredicted US GHG emissions is observed in the later years after NAFTA's passage. As the USA is the top destination for Mexican exports, and there is extensive intra-company trade between those two countries, the results imply that the "pollution-haven" hypothesis may hold.