Trade liberalization in environmental goods

Last changed: 25 May 2021
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Saga Wrenfelt, Agricultural programme - Economics and Management

Summary

This paper investigates if trade liberalization is an effective policy method for expanding the use of environmental goods to mitigate environmental pollution and counteract environmental challenges. The Asia-Pacific Economic Cooperation (APEC) member countries have jointly introduced a reduction in tariffs on 54 environmental goods (at a 6 HS-level) by 5 percent or less in 2015, to improve their members' economies, increase trade, develop and disseminate relevant technology and to more easily prevent climate change and other environmental problems.

The goal of the study is to get a better understanding of the impact of reducing trade barriers for environmental goods through using data on imports of the two environmental goods among 19 APEC member countries over the period of 2003 to 2016. These two goods are Cleaning Water Machinery and Environmental Measuring Instruments. To assess this, an aggregated gravity model is used. In this case, the model estimates the parameters for the two environmental goods imports, the tariffs, population and the GDP per capita for 19 of APEC’s member countries.

The result of this study showed for both types of environmental goods that the tariff has a modest effect on imports. Previous studies have also shown that only a liberalization of tariffs is not enough for increased trade in environmental goods, but that there is a connection between these and stronger environmental laws.

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About me

Saga Wrenfelt

Hi, my name is Saga Wrenfelt. I'm studying economics and am in my third year. I study it because I am interested in environmental and sustainability issues. To be able to work with it in the future, I think it is important to understand how society works, which I learn by studying economics.

saga.wrenfelt@gmail.com

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