NAFTA, Environmental Kuznets Curves, and Mexico’s Progress

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By Jody Lipford and Bruce Yandle

Abstract

The North American Free Trade Agreement generated much debate about the effects of freer and more open trade on the environment. Many environmentalists believed increased trade would lead to environmental degradation, while many economists argued that increased trade would enrich countries, leading to environmental improvement. Substantial empirical work supported an Environmental Kuznets Curve in which rising income increases pollution until a certain threshold is reached, after which pollution diminishes. In this paper we examine Mexico's environmental record in the pre- and post-NAFTA periods. The evidence shows that although Mexico's environmental quality has improved by some measures, by most measures it has deteriorated. We conclude that economic growth has been insufficient to bring widespread environmental improvement.

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 Bruce Yandle is Dean Emeritus of Clemson University's College of Business & Behavioral Science, Alumni Distinguished Professor of Economics Emeritus, Clemson University, Senior Fellow, PERC, Senior Fellow, Clemson's Thurmond Institute, and Distinguished Adjunct Professor of Economics, Mercatus Center at George Mason University.  Author of...
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