International trade, economic growth and the environment in high- and low-income countries

Theoretically, more openness in trade may affect the environment positively or negatively. This paper empirically tests the hypothesis that trade openness is good for the environment. While the results reject the hypothesis for sulphur dioxide emissions from 1960 to 1999 for all 115 countries, and separately, for low-income countries, the hypothesis is supported for high-income countries. Unlike in the existing literature on trade and the environment, the scale effect has a larger impact than the technique effect in all specifications.