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Ecological Economics 48 (2004) 71– 81
/locate/ecolecon
Analysis
Trade, the pollution haven hypothesis and the environmental
Kuznets curve: examining the linkages
Matthew A. Cole *
Department of Economics, University of Birmingham, Edgbaston, Birmingham, B15 2TT, UK
Received 30 October 2002; received in revised form 28 July 2003; accepted 10 September 2003
Abstract
This paper examines the extent to which the EKC inverted U relationship can be explained by trade and specifically the
migration or displacement of ‘dirty’ industries from the developed regions to the developing regions (the pollution haven
hypothesis (PHH)). Using detailed data on North–South trade flows for pollution intensive products the evidence for the PHH
is assessed. Emissions of 10 air and water pollutants are then estimated, controlling for trade openness, structural change and
‘dirty’ North–South trade flows. Evidence of pollution haven effects is found, although such effects do not appear to be
widespread and appear to be relatively small compared to the roles played other explanatory variables.
D 2003 Elsevier B.V. All rights reserved.
JEL classification: O10; O13; F18; Q25
Keywords: Economic growth; Trade; Environmental degradation; Pollution haven hypothesis; Environmental kuznets curves
1. Introduction One specific criticism leveled at the EKC is that, in
its simplest form, it does not account for trade patterns
The possible existence of an inve
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