Overall the results from these studies are best described as mixed. Apart from specific case studies, there is very little evidence linking liberalized trade in general with significant changes in the environment. In addition, there is little evidence that differences in abatement costs are a significant determinant of trade flows. There is, however, evidence that increases in income will, after a point, lead to lower concentrations of some pollutants. But the role that trade plays in this process is not entirely clear. Finally, there is some evidence that the composition of exports of some developing countries have become dirtier over time but these results follow only from a relatively narrow set of toxic pollutants recorded in the U.S. inventory.
Ideally an empirical investigation should be able to distinguish between the negative environmental consequences of scalar increases in economic activity – the scale effect – and the positive environmental consequences of increases in income that call for cleaner production methods – the technique effect. Grossman and Krueger and others interpret their hump-shaped Kuznets curve as reflecting the relative strength of scale versus technique effects, but they do not provide separate estimates of their magnitude.4 As well, an empirical investigation should be able to identify how trade affects average pollution intensity of national output by altering its composition. Many studies include some measure of openness in their regressions to capture a composition effect, but there is very little reason to believe that openness per se affects the composition of output in all countries in the same way. Without a measure of the compositional effects of trade, we cannot assess whether trade’s real income gains come at the cost of a dirtier mix of national production. Finally, many of the existing studies have a very weak theoretical base and this makes inference difficult. Without a causal mechanism linking trade to consequent changes in the environment it is difficult to isolate the effects of trade on the environment from other factors such as technological changes in abatement activity, capital accumulation, or other sources of real income change.