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Exporting pollution: where do multinational firms emit CO2?
[Effects of air quality regulations on polluting industries]

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Listed:
  • Itzhak Ben-David
  • Yeejin Jang
  • Stefanie Kleimeier
  • Michael Viehs

Abstract

SUMMARYDespite widespread awareness of the detrimental impact of CO2 pollution on the world climate, countries vary widely in how they design and enforce environmental laws. Using novel microdata about multinational firms’ CO2 emissions across countries, we document that firms headquartered in countries with strict environmental policies perform their polluting activities abroad in countries with relatively weaker policies. These effects are largely driven by tightened environmental policies in home countries that incentivize firms to pollute abroad rather than lenient foreign policies that attract those firms. Although firms headquartered in countries with strict domestic environmental policies are more likely to export pollution to foreign countries, they nevertheless emit somewhat less overall CO2 globally.

Suggested Citation

  • Itzhak Ben-David & Yeejin Jang & Stefanie Kleimeier & Michael Viehs, 2021. "Exporting pollution: where do multinational firms emit CO2? [Effects of air quality regulations on polluting industries]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 36(107), pages 377-437.
  • Handle: RePEc:oup:ecpoli:v:36:y:2021:i:107:p:377-437.
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    File URL: http://hdl.handle.net/10.1093/epolic/eiab009
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    References listed on IDEAS

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    Cited by:

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    3. Peter Kjær Kruse-Andersen & Peter Birch Sørensen, 2021. "Opimal Unilateral Climate Policy with Carbon Leakage at the Extensive and the Intensive Margin," CESifo Working Paper Series 9185, CESifo.
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    6. Udichibarna Bose, 2023. "Does green transition promote green innovation and technological acquisitions?," Working Papers w202305, Banco de Portugal, Economics and Research Department.
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    8. Essossinam Ali & Hodabalo Bataka & Kwami Ossadzifo Wonyra & Nadège Essossolim Awade & Nèmè Nalèwazou Braly, 2024. "Global value chains participation and environmental pollution in developing countries: Does digitalization matter?," Journal of International Development, John Wiley & Sons, Ltd., vol. 36(1), pages 451-478, January.
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    11. Sining Song & Yan Dong & Thomas Kull & Craig Carter & Kefeng Xu, 2023. "Supply chain leakage of greenhouse gas emissions and supplier innovation," Production and Operations Management, Production and Operations Management Society, vol. 32(3), pages 882-903, March.

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    More about this item

    Keywords

    F23; N50; O13; P18; Q56; R11;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • N50 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - General, International, or Comparative
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • P18 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Energy; Environment
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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