Environmental Impact of Trade Policy Reforms on Pollution Intensity

Abstract

The paper attempts to provide a theoretical analysis as well as some indicators of the linkage between trade policy and the environment. It looks at what has happened to the share of manufacturing industries by pollution classification overtime and finds tat the share of non-pollutive/non-hazardous industries has grown over the years covering the period of trade reforms. It also analyzes the impact of trade policy on the environment using a simulation model, which predicts what happens to pollution intensity with and without trade reforms. The results indicate some positive impact of trade reforms on the environment and that the Philippines should pursue its greater trade liberalization and implement the corresponding environmental measures.

1. Medalla, Erlinda and Dorothea Lazaro. 2005. Does trade lead to a race to the bottom in environmental standards? Another look at the issues. Discussion Papers DP 2005-23. Philippine Institute for Development Studies.