Do stringent environmental regulations reduce the international competitiveness of environmentally sensitive goods? A global perspective

In this paper I examine whether stringent environmental standards reduce the international competitiveness of environmentally sensitive industries using a comprehensive dataset of trade flows of environmentally sensitive goods (ESGs) disaggregated at the four-digit level of the Standard International Trade Classification. The data relate 1965-95 and cover 34 countries, accounting for nearly 80% of world exports of ESGs in 1995. I find that export performance of ESGs for most countries remained unchanged between the 1960s and 1990s, despite the introduction of stringent environmental standards in most developed countries in the 1970s and 1980s.