Trade agreements and CO2 emissions in Asian countries: accounting for institutional heterogeneity

This paper aims to measure the impact of environmental provisions in free-trade agreements on pollution levels in 40 Asian economies for the period 1990–2019. Following the failure of WTO negotiations, there has been a rapid proliferation of preferential trade agreements incorporating various types...

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Bibliographic Details
Published in:Environmental science and pollution research international 2024-02, Vol.31 (6), p.9197-9217
Main Authors: Hassan, Mehboob Ul, Rana, Arslan Tariq, Khan, Muhammad, Gillani, Samreen
Format: Article
Language:English
Subjects:
Air pollution
Aquatic Pollution
Atmospheric Protection/Air Quality Control/Air Pollution
Carbon dioxide
Carbon dioxide emissions
Earth and Environmental Science
Ecotoxicology
Emissions
Environment
Environmental Chemistry
Environmental effects
Environmental Health
Environmental impact
Environmental quality
Error correction
Heterogeneity
Pollution levels
Research Article
Trade agreements
Waste Water Technology
Water Management
Water Pollution Control
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Summary:This paper aims to measure the impact of environmental provisions in free-trade agreements on pollution levels in 40 Asian economies for the period 1990–2019. Following the failure of WTO negotiations, there has been a rapid proliferation of preferential trade agreements incorporating various types of environmental clauses. We exploit such changes to assess their influence on pollution emissions. We use a DOLS approach that considers the potential endogeneity of environmental clauses. Further, panel vector error correction models (VECM) are employed for examining the presence of a cointegration relationship among the variables studied. Overall, our findings indicate that these environmental clauses have heterogenous effects on CO 2 emissions. We do not find significant effects of environmental clauses on pollution. However, this result is driven by environmental provisions that are not legally enforceable. We do find a positive effect of environmental clauses with a higher level of legalism on the environmental quality. These results show that the inclusion of environmental provisions in trade agreements is not sufficient by itself. Such provisions should incorporate a legally enforceable framework to effectively address environmental concerns. These findings have significant policy implications for Asian countries.
ISSN:1614-7499
0944-1344
1614-7499
DOI:10.1007/s11356-023-31684-1