NO. 278 APRIL 1998
In this paper I examine whether stringent environmental standards reduce the international competitiveness of environmentally sensitive industries using a comprehensive dataset of trade flows of environmentally sensitive goods (ESGs) disaggregated at the four-digit level of the Standard International Trade Classification. The data relate to the period from 1965 to 1995 and cover 34 countries which accounted for nearly 80 per cent of world exports of ESGs in 1995. The important empirical finding is that export performance of ESGs for most of the countries remained unchanged between the 1960s and 1990s despite the introduction of stringent environmental standards in most developed countries in the 1970s and 1980s. Thus the claim that higher environmental standards reduce the international competitiveness of ESGs can not be justified in the light of available data.