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What is Pollution Haven Hypothesis

Chapter 5
Handbook of Research on Economic and Political Implications of Green Trading and Energy Use
Pollution haven hypothesis (PHH) suggests that the developed countries impose tougher environmental policies than do the developing countries, which results in distortion of existing patterns of comparative advantage. So, the polluting industries shift operations from the developed to the developing countries; developing countries thus become “pollution havens.”
Published in Chapter:
Environmental Regulation, International Trade, and Informal Sector: Theory, Policy, and Indian Experience
Tonmoy Chatterjee (Ananda Chandra College, India)
Copyright: © 2019 |Pages: 27
DOI: 10.4018/978-1-5225-8547-3.ch005
Abstract
This chapter deals with some contemporary issues related to trade and environment, which are mainly faced by the developing nations of the world. In this context, the present study has considered some facts and figures of Indian tannery industry for realization of the above-mentioned objective. In this chapter, an attempt has been made to analyze theoretically the effect of both environmental regulation and trade liberalization on the output of different sectors and also on the national welfare in a small open economy. To categorize this, the authors have presented a theoretical model based on the general equilibrium framework that mainly highlights a paradoxical result. Apart from this, the present research shows that the capital used specifically in advanced export sector is likely to affect the welfare positively, and the capital used by the rest of the economy is likely to affect the welfare adversely when usual export sector of the economy vanishes, and the opposite will occur when the pollution-intensive informal sector of the economy vanishes.
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Chapter 6
Economic Growth and Environmental Impacts of Foreign Direct Investment in Emerging Market Economies
It is the idea that polluting industries will relocate to jurisdictions with less stringent environmental regulations.
Published in Chapter: Economic Growth and Environmental Impacts of Foreign Direct Investment in Emerging Market Economies; From: Handbook of Research on Economic and Political Implications of Green Trading and Energy Use
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Chapter 5
The Impact of Foreign Direct Investment on CO2 Emission: Evidence From Selected G-20 Countries
It shows that FDI raises carbon emissions by locating less environmental standards to countries it invest.
Published in Chapter: The Impact of Foreign Direct Investment on CO2 Emission: Evidence From Selected G-20 Countries; From: Handbook of Research on Global Enterprise Operations and Opportunities
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Chapter 15
Impact of CAFTA-DR's Environmental Provisions on Member Countries and Firm-Level Environmental Voluntary Mechanisms
Generated when free international trade leads to the relocation of dirty goods production from high income and strict environmental regulation countries to low income, low environmental regulation countries.
Published in Chapter: Impact of CAFTA-DR's Environmental Provisions on Member Countries and Firm-Level Environmental Voluntary Mechanisms; From: Handbook of Research on Economic Growth and Technological Change in Latin America
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Chapter 3
The Benefits and Costs of Foreign Direct Investment for Sustainability in Emerging Market Economies
Contrary to the pollution halo hypothesis, the pollution haven hypothesis argue that multinationals contribute pollution in the host country. The hypothesis is centered around the idea that multinationals use lands of developing countries to produce for the country of origin or for the world since in the country of origin the environmental laws and regulations restrict the use of cheap technologies that are hostile to the environment. Therefore, while multinationalgain substantial competitive edge by producing in countries with less stringent environmental laws, these countries would experience adverse environmental consequenceswith increase in their GDP per capita.
Published in Chapter: The Benefits and Costs of Foreign Direct Investment for Sustainability in Emerging Market Economies; From: Handbook of Research on Economic and Political Implications of Green Trading and Energy Use
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