The Relationship between Skill Content of Trade and Carbon Dioxide Emissions

This study examines the relationship between the trade pattern and the environment. Although it is widely thought that industries with higher labor skill content are cleaner, no clear evidence is provided. It is hypothesized that various types of trading activities influence the environment differently. The present sample includes 35 countries at different stages of development and 56 industries divided into three groups according to skill intensity in the panel data over 1991-2006. The results reveal a positive effect on CO2 emission arising from trade specialization in low skill industries and an insignificant effect from trade specialization in medium-high-skill industries. There are also distinctions between the skill content of exports and imports and their respective impacts on emissions, as well as between OECD and non-OECD countries.