Trade Openness and Environmental Emissions: Evidence from a Meta-Analysis

Abstract

How trade affects environmental emissions has generated heterogeneous results over the years. This is due to empirical ambiguities that are endemic in the literature. In order to evaluate and explain the discrepancy in the literature, this paper conducts a meta-analysis of 88 empirical studies published until 2018. Our results show that trade contributes to environmental emissions after controlling for publication bias and heterogeneity. In explaining the heterogeneous results across the primary studies, our findings largely suggest the estimated elasticities depend systematically on the estimation characteristics, the choice of pollutants and the publication characteristics of the primary studies. Accounting for heterogeneity, the result remains robust only for CO2 emissions compared to SO2. Overall, the trade elasticity of emissions effect remains robust when we decompose the analyses for different groups of countries, however, the emissions-content of trade is more pronounced for developed compared to developing countries.