International Trade in Hazardous Waste

This paper combines a gravity model with country characteristics to examine trade in hazardous waste. A significant pollution haven effect is observed as rising per capita income reduces the amount of hazardous waste countries’ import. However, this effect is outweighed by high-income countries’ relative capital abundance, and by rising GDP creating larger increases in disposal capacity than waste production. Simulating the volume and direction of hazardous waste trade in the absence of distance costs, leads to a 153% increase in waste traded, and a larger increase in shipments from non-OECD countries to OECD members than from the OECD to nonmembers.