CETA and Air Pollution

The study empirically investigates and shows that on average, the implementation of the Comprehensive Economic and Trade Agreement (CETA) may contribute to the fight against global warming. This study finds that on average, a one percent increase of a percentage point in the bilateral volume of trade as a portion of GDP between Canada and a typical EU member could help reduce annual per capita emissions of GHGs in an average CETA member by about .57 percent. The results also show that the presence of CETA may decrease annual per capita emissions of GHGs in almost all CETA members. There is no statistically significant evidence suggesting an increase of GHGs per capita emissions in any CETA member, regardless of the model or statistical method employed in the paper. These results stand because of the combinations of the factor endowment hypothesis (FEH), the pollution haven hypothesis based on population density variations (PHH2), and the pollution haven hypothesis based on national income differences (PHH1) between each EU member and Canada.