The first hypothesis is "pollution haven hypothesis" (PHH), in which it is presumed that there will be high pollution in developing countries after entering into a FTA because of the country's non-restrictive environmental regulations.
"Trade, the pollution haven hypothesis and the environmental Kuznets curve: examining the linkages." Ecological Economics 48, no.
These concerns have strengthened the well-known pollution haven hypothesis, where environmental standards and regulations play a key role in the reallocation of polluting industries with poor environmental regulation.
Unbundling the pollution haven hypothesis, The B.E.
The author found that the trade openness had a negative impact on several air pollutants including S[O.sub.2], and found mixed evidences for the pollution haven hypothesis depending on the pollutants examined.
However, if the "pollution haven hypothesis" effect dominates, we expect a positive sign.
Central to the literature on trade's effect on the environment is the pollution haven hypothesis
(PHH) that predicts that removal of trade barriers results in flow of dirty industries to countries with lax environmental regulations.
NAFTA and the pollution haven hypothesis
. The Policy Studies Journal 35(2):239-244.
Based on the H-O-S model, free mobility of factors can lead to national resource movement from places of excess to places of relative scarcity, and the movement of polluting industries from their home countries to developing countries where environmental regulation is a matter of formality (the pollution haven hypothesis
Economists have carried out extensive studies of the "pollution haven hypothesis
," i.e., the notion that polluting industries will flee to countries with lax environmental standards.