1 The Determinants of Trade in Recyclable Wastes, the Structure of Recycling Sectors, and the Effects of Trade Restriction

This paper examines theoretically the trade pattern of recyclable waste and the effect of trade restriction on the recycling activities. Moreover, on the trade pattern, we conduct a empirical analysis using a gravity model. In particular, we focus on the trade from developed countries to developing countries. The relationship between the wages and the volume of imports is focused on. The reason is that, if a recycling process can be separated from the production process of final goods or/and the consumption process, it may be located in the labor-abundant, less developed countries. If it is true, the environmental and health problems may become serious. We demonstrate empirically that, the higher is the wage/per capita income of a developing country, the more recyclable wastes it imports. This implies that there is no evidence for a pollution haven in the sense that the dirty recycling sectors expand in the least developed countries more rapidly than the more “developed ” developing countries. Furthermore, it may be that trade restriction for reducing environmental damage is accompanied by a big loss in efficiency