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Technology, International Trade and Pollution from Us Manufacturing

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Technology, International Trade and pollution from US Manufacturing

(Did the green shift of the US manufacturing been accompanied by a "brow shift" in imports?)

Pollution emitted by US manufacturers has declined by 25 percent over the past several decades, while at the same time; the real value of manufacturing output grew by 25 percent. This article is a study that investigates the source of such a reduction in industrial pollution. Should the US industrial cleanup be credited to advances in production processes namely technology or should the credit be allocated mainly to changes in the composition of goods manufactured in the United States. This question arises because of its implication to international trade. If In fact, the source of the US industrial cleanup is mainly due to change in composition of goods manufactured in the United States a genuine question to ask is whether Americans consume less polluting goods or whether there is an increase in polluting goods imported. Hence the article seeks at revealing how much of the overall industrial pollution decrease can be attributed to technology and how much comes from international trade. In case the US industries succeeded in reducing their level of pollution over the years by merely producing less of polluting goods domestically and importing those goods from less developed countries, then US experience will not be replicable on a global scale, and international trade would be merely a mean to escape abiding to effective environmental policies.

The results suggest that technology far outweighs products composition change in explaining US industries historical pollution reduction. Manufacturing emissions of the four common air pollutants examined in the article (SO2, NO2, CO and VOCs) declined 25 percent collectively from 1987 to 2001, despite the large increase in manufacturing output. Hence, for the typical pollutant, increased international trade explains less than one-third of the pollution reductions from composition changes in US manufacturing.

Surprisingly the article also suggests that over the period of 1987 to 2001, imports have shifted towards cleaner goods faster than domestic goods. Most import growth has come from industries that are not pollution-intensive in the US. Hence this suggests that the "green shift" of US manufacturing has not been replaced by a corresponding "brown shift" in import. Quite the opposite, import has been shifting toward cleaner goods faster than the goods produced domestically.

"Most of the pollution reduction over the past 30 years has come from changes in technology, rather than from changes in imports or changes in the types of goods produced domestically." The article solely credits technological innovations for the pollution reduction in the United States; however the outsourcing and import of those

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