Mattia Di Ubaldo, Steven McGuire, Vikrant Shirodkar, 03 January 2021

The adoption of environmentally friendly production methods matters to both firms and policymakers, as both are concerned with reducing the emissions of greenhouse gases and pollutants. This column studies the effect on emissions of environmental protection provisions in EU free trade agreements, as well as that of private ISO-14001 environmental certifications. Environmental protection provisions in EU trade agreements are associated with lower levels of sulphur dioxide and nitrogen oxide emissions, while ISO-14001 certifications are associated with lower levels of greenhouse gas emissions. For carbon dioxide, ISO-14001 certifications matter only for members of trade agreements with environmental protection provisions, suggesting the existence of complementarities between private and public environmental regulation.

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