The Effects of Trade (Environmental and Non-Environmental Goods) on Co2 Emissions in OECD Countries : Evidence from Method of Moments Quantile Regression

This study analyzes the impact of trade flows in environmental and non-environmental goods on carbon emissions in 36 OECD countries from 1999 to 2020. Using Moment Quantile Regression, our analysis finds that the effects of trade on carbon emissions vary across different levels of emissions. Fixed effects regression shows that environmental goods exports and imports have a negative effect on carbon emissions, while environmental goods imports have a positive effect on higher levels of carbon emissions. This study emphasizes the importance of a comprehensive approach to addressing climate change, including policies targeting both production-based and consumption-based carbon emissions. It suggests that promoting trade in environmental goods could be an effective strategy to reduce carbon emissions, but policymakers must also consider the risks associated with imports of environmental and non-environmental goods. Overall, this study provides valuable insights for policymakers and researchers interested in the intersection of trade and climate change in OECD countries. By carefully considering the specific effects of different trade flows on carbon emissions, policymakers can develop policies that contribute to international efforts to mitigate climate change