A systematic review of trade and environment linkages

Abstract

International trade generates both economic opportunities and environmental challenges, making the study of their interlinkages highly relevant for sustainable development. This study systematically analyzes the literature on linkages between trade and environment as well as methodological trends in the subject field and tries to develop a pathway for future researchers. A systematic literature review is conducted, ultimately selecting 50 articles from an initial pool of 643, following a multi-step screening process based on PRISMA framework. Non-English articles, datasets, reports, book chapters are excluded. The review found that the trade-environment relationship is complex and context-dependent: while evidence substantially supports the Environmental Kuznets Curve (EKC), the Pollution Haven Hypothesis (PHH) has mixed support, changing by pollutant, area, and institutional quality. The review highlights key policy implications, such as the need to promote clean energy transitions, improve institutional quality, and incorporate environmental protections into trade agreements in order to ensure that trade contributes positively to sustainability. For these measures to be implemented and enforced effectively, international collaboration is necessary. The author has given directions for future researchers in terms of identified methodological trends that are currently available in the literature.