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American Economic Journal: Economic Policy: Vol. 2 No. 4 (November 2010)

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International Trade in Used Vehicles: The Environmental Consequences of NAFTA

Article Citation

Davis, Lucas W., and Matthew E. Kahn. 2010. "International Trade in Used Vehicles: The Environmental Consequences of NAFTA." American Economic Journal: Economic Policy, 2(4): 58-82.

DOI: 10.1257/pol.2.4.58

Abstract

Since trade restrictions were eliminated in 2005, Mexico has imported over 2.5 million used vehicles from the United States. Using a unique, vehicle-level dataset, we find that traded vehicles are dirtier than the stock of vehicles in the United States and cleaner than the stock in Mexico, so when a vehicle is traded from the United States to Mexico average vehicle emissions per mile tend to decrease in both countries. Overall, however, the evidence suggests that trade has increased total lifetime emissions, primarily because of low vehicle retirement rates in Mexico. (JEL F13, F14, L62, O13, O19, Q53, Q56)

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Authors

Davis, Lucas W. (U CA, Berkeley)
Kahn, Matthew E. (Institute for the Environment, UCLA)

JEL Classifications

F13: Trade Policy; International Trade Organizations
F14: Country and Industry Studies of Trade
L62: Automobiles; Other Transportation Equipment
O13: Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
O19: International Linkages to Development; Role of International Organizations
Q53: Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
Q56: Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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