OECD Trade and Environment Working Papers

Selected studies addressing the policy interface between trade and environment prepared for use within the OECD. They address such issues a liberalizing trade in goods that affect the environment, and trade in environmental goods and services.


Assessing the Effectiveness of Environmental Provisions in Regional Trade Agreements

An Empirical Analysis

This report aims to test whether the inclusion of environmental provisions in Regional Trade Agreements (RTAs) has contributed to the improvement of environmental quality among the Parties to these agreements through empirical modelling and analysis. Three indicators are considered as a proxy for environmental quality: concentrations of suspended particulate matter less than 2.5 microns (PM2.5), sulphur dioxide (SO2) and nitrogen oxide (NOx).

The analysis identifies a statistically significant and positive relationship between membership in RTAs, either with or without environmental provisions, and improved environmental quality for two out of three pollutants investigated. However, the extent to which RTAs with environmental provisions makes an additional difference on emissions in comparison to those without environmental provisions could not be concluded with enough statistical certainty under the current empirical framework. Future analysis could benefit from better information on the channels of effects and the further developed environmental indicators on both policy and output.


Keywords: environment policy, environmental provisions, trade policy, Regional trade agreements, trade and environment, free trade agreements
JEL: F13: International Economics / Trade / Trade Policy; International Trade Organizations; Q58: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Environmental Economics: Government Policy; R11: Urban, Rural, Regional, Real Estate, and Transportation Economics / General Regional Economics / Regional Economic Activity: Growth, Development, Environmental Issues, and Changes; F18: International Economics / Trade / Trade and Environment; Q56: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
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