Impact of Trade Liberalization on the Environment: The Case of Afghanistan

The melting of icebergs, decomposition of the ozone layer, greenhouse gasses, nuclear wastes all together with many other environmental related disputes have turned environmental safety and protection into the priority of environmentalists’ and governments in the recent decade. The earth is losing its ability to further back the future generations of living species and the human being with their immature decisions and inventions is liable for this situation of the environment. In this study, we investigated the possible impact/impacts of the trade Liberalization on the environment by employing the Ordinary Least Square (OLS) method for a data period from 2005-2017. Trade Intensity and the three effects of trade liberalization: Scale Effect, Composition Effect and the Technic Effect (Independent Variables) and pollution (Dependent Variable) are the variables under study. The findings revealed a negative relationship between pollution and trade intensity and a positive relationship between pollution and the effects of trade liberalization. Combining the estimates of all three effects yields a somewhat surprising conclusion that freer trade appears to be good for the environment. Therefore, Afghanistan government should be open to international market but accompany trade liberalization with environmental safety and protection policies in order to improve the sustainability of environment