Are deep and comprehensive regional trade agreements helping to reduce air pollution?

This paper investigates whether membership in Regional Trade agreements (RTAs) with environmental provisions (EPs) affect relative and absolute levels of environmental quality and whether the inclusion of most comprehensive EPs is associated to higher environmental quality. In order to do so, the determinants of PM2.5 population weighted concentrations are estimated for a sample of OECD countries and OECD+BRIICS over the period 1990 to 2011. The usual controls for scale, composition and technique effects are added to the estimated model and the endogeneity of income and trade variables is addressed using instruments. The main results indicate that membership in RTAs with EPs is in general associated with higher environmental quality in absolute terms, whereas no significant results are found for RTAs without EPs. Moreover, the concentration in emissions of the pairs of countries that belong to an RTA with EPs tends to converge for the country sample.