The Transnational Tilt of the Treadmill and the Role of Trade Openness on Carbon Emissions: A Comparative International Study, 1965–2010

Abstract

There are various schools of thought regarding the relationship between the environment and economy. Ecological modernization argues that the harmful effects of economic growth and development on the environment decline through time, whereas the treadmill of production and ecologically unequal exchange postulate different perspectives. This study relies on World Bank and World Resources Institute data for the period of 1965–2010. Time‐series cross‐sectional Prais‐Winsten (PW) regression models with panel‐corrected standard errors (PCSE) are employed to examine whether economic growth and trade openness intensified or decoupled in relation to three measures of carbon dioxide (CO2) emissions during this period. The findings of this study indicate that there has been a “tilt” in the treadmill of production—that is, the most environmentally degrading production processes have moved to less developed countries. Furthermore, integration into the world economy has been associated with an intensification in CO2 emissions for less developed countries. Surprisingly, however, this phenomenon does not seem to be driven by exports sent to high‐income nations, suggesting that there are mechanisms embodied within the global organization of production that require further exploration.