1887

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.

English

Measuring Environmental Regulatory Stringency

Researchers have long been interested in whether environmental regulations discourage investment, reduce labour demand, or alter patterns of international trade. But estimating those consequences of regulations requires devising a means of measuring their stringency empirically. While creating such a measure is often portrayed as a data-collection problem, we identify four fundamental conceptual obstacles, which we label multidimensionality, simultaneity, industrial composition, and capital vintage. We then describe the long history of attempts to measure environmental regulatory stringency, and assess their relative success in light of those obstacles. Finally, we propose a new measure of stringency that would be based on emissions data and could be constructed separately for different pollutants.

English

Keywords: trade and environment, environmental subsidies, environmental regulations
JEL: D78: Microeconomics / Analysis of Collective Decision-Making / Positive Analysis of Policy Formulation and Implementation; F64: International Economics / Economic Impacts of Globalization / Economic Impacts of Globalization: Environment; Q52: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Pollution Control Adoption and Costs; Distributional Effects; Employment Effects; L51: Industrial Organization / Regulation and Industrial Policy / Economics of Regulation; F18: International Economics / Trade / Trade and Environment; Q53: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling; Q58: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Environmental Economics: Government Policy; C26: Mathematical and Quantitative Methods / Single Equation Models; Single Variables / Single Equation Models: Single Variables: Instrumental Variables (IV) Estimation; C83: Mathematical and Quantitative Methods / Data Collection and Data Estimation Methodology; Computer Programs / Survey Methods; Sampling Methods; C43: Mathematical and Quantitative Methods / Econometric and Statistical Methods: Special Topics / Index Numbers and Aggregation; leading indicators
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