Examining the Linkages with Japan and the USA *

This paper investigates how the environmental pollution in East Asian countries can be affected by trade of ‘dirty ’ goods with Japan and the USA. By controlling for trade openness, the share of manufacturing in GDP, and the trade of pollution-intensive products with Japan and the USA, CO2 emissions are estimated for ten East Asian countries between 1988 and 2000. Our results indicate that increasing exports in ‘dirty ’ industries to Japan and domestic industrialization in East Asia tend to raise CO2 emissions in East Asian countries, while ‘dirty ’ imports from Japan and the USA do not affect CO2 emissions in the area