This report aims to test whether the inclusion of environmental provisions in Regional Trade Agreements (RTAs) has contributed to the improvement of environmental quality among the Parties to these agreements through empirical modelling and analysis. Three indicators are considered as a proxy for environmental quality: concentrations of suspended particulate matter less than 2.5 microns (PM2.5), sulphur dioxide (SO2) and nitrogen oxide (NOx).
The analysis identifies a statistically significant and positive relationship between membership in RTAs, either with or without environmental provisions, and improved environmental quality for two out of three pollutants investigated. However, the extent to which RTAs with environmental provisions makes an additional difference on emissions in comparison to those without environmental provisions could not be concluded with enough statistical certainty under the current empirical framework. Future analysis could benefit from better information on the channels of effects and the further developed environmental indicators on both policy and output.
