Trade and environmental damage in US agriculture
by Shunsuke Managi, David Karemera
World Review of Science, Technology and Sustainable Development (WRSTSD), Vol. 2, No. 2, 2005

Abstract: Trade liberalisation has the potential to contribute to overall improvements in environmental performance, while countries might lose a comparative advantage in trade because of stringent environmental regulations. We analyse the environmental damages in the US agriculture since 1973 using state level data and conclude that states lose a comparative advantage by stringent environmental regulations. The decomposition of trade's effect into scale, technique and composition effects, and a further decomposition of the technique effect into environmental technique and environmental scale effects, show its relevance as major determinants of environmental damage. The differences in production technology and factor supplies are major factors affecting trade patterns. Finally, human risk factors suggest that freer agricultural trade is bad for the environment.

Online publication date: Mon, 04-Jul-2005

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