An Empirical Examination of the Pollution Haven Hypothesis for India: Towards a Green Leontief Paradox?

Abstract

Using input–output analysis, we examine whether India can be regarded as a pollution haven. We calculate the extra CO2, SO2 and NOx emissions induced by 1 billion rupees of additional exports. This is compared with the reduction of Indian pollution caused by an import increase of equal size. In contrast to what the pollution haven hypothesis states for developing countries, we find that India considerably gains from extra trade. Comparing 1996/1997 with 1991/1992, the gains have only increased, indicating that India has moved␣further away from being a pollution haven. The outcome is robust to changes in the underlying assumptions.