Trading wastes

The international trade of waste products is large and has grown substantially in the past decade. While a sizeable literature has flourished around the notion of international pollution havens (the movement of goods production with polluting by-products to low environmental regulation countries), this paper is the first to explicitly test the hypothesis that differences in environmental regulation across countries can create international waste haven effects (the exporting of physical waste by-products, rather than goods production, to low environmental regulation countries). Using bilateral waste trade data and an index of environmental stringency for 92 countries, compelling evidence is found that waste imports increase for a country whose environmental regulations deteriorate vis-à-vis it's trading partner, implying that differences in environmental standards play an important role in international waste trade flows for some country pairs.