An International Trade Network Analysis of the Environment

Abstract

The paper uses the new advances of the International Trade Network literature to analyze the relationship between international trade and the environment in a global context. This framework shows that bilateral agreements can either increase or decrease local pollution depending on the current trade network structure, and that the environment is benefited when there is some degree of international trade integration. The article also shows that the stability of the international trade system is strongly affected when environmental considerations are included in the welfare function.

JEL Classifications:

• F12
• Q56

Keywords:

• local pollution
• international trade networks