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Impacts of Environmental Policies on Global Green Trade

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  • Sung Jin Kang

    (Department of Economics, Korea University, Seoul 02841, Korea)

  • Sun Lee

    (Department of Economics, Korea University, Seoul 02841, Korea)

Abstract

The objective of this study was to investigate the impact of environmental policies on bilateral green exports among developed and developing countries. The empirical analysis was based on the fixed-effects gravity model estimation with the PPML (Poisson pseudo-maximum likelihood) for bilateral green trade of world countries for 1990–2019. This study focused on two proxy environmental policy indicators: environment-related tax and energy intensity. The major findings were that, first, promotion of environment-related tax increases green exports among HIC (high-income countries) and, second, an increase in the green trade of a country depends on the energy intensity level of its trading partner countries in order to stabilize domestic demand and production. This result is shown to be significant and consistent within the trade between the same income groups. Thus, supporting the green growth strategy, empirical results suggest that LMY (low- and middle-income) countries have to promote environmental policies and green production processes to be competitive in the global market.

Suggested Citation

  • Sung Jin Kang & Sun Lee, 2021. "Impacts of Environmental Policies on Global Green Trade," Sustainability, MDPI, vol. 13(3), pages 1-15, February.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:3:p:1517-:d:491169
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    References listed on IDEAS

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    Cited by:

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    4. Xin Qi, 2023. "How does ocean policy affect the economic development of coastal areas?," SN Business & Economics, Springer, vol. 3(9), pages 1-25, September.
    5. Chien‐Chiang Lee & Godwin Olasehinde‐Williams & Bright Akwasi Gyamfi, 2023. "The synergistic effect of green trade and economic complexity on sustainable environment: A new perspective on the economic and ecological components of sustainable development," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(2), pages 976-989, April.

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