There has long been a debate about whether democracies have a better environmental record than authoritarian states on average, but the question remains unresolved. New research sheds light on this unclear connection by examining a factor that is often overlooked: pollution offshoring. This is the outsourcing of polluting production to other countries.

How does pollution shift? International trade plays a key role. Instead of producing goods with a high environmental impact domestically, some countries import them from abroad, effectively shifting the environmental burden to exporting countries. This process allows countries to reduce pollution on their own territory while shifting its consequences elsewhere. In addition to direct externalization of costs, such as waste or transboundary pollution, countries also engage in indirect forms of externalization: they change their production and consumption patterns and outsource a significant part of the environmental impacts of domestic consumption.

There are theoretical reasons why democracies might shift more pollution. First, greater freedom of scientific research, of public opinion formation and expression, and of the influence of interest groups and the media allow for stronger public demand for environmental protection. Democratic politicians, who have greater incentives to respond to public concerns, may implement stricter environmental policies. This can lead to “domestic greening through pollution shifting,” as more stringent domestic regulations lead industries to shift polluting activities abroad. Second, political freedoms are closely linked to economic freedoms, including trade and consumption. Unrestricted international trade allows democratic politicians to satisfy domestic environmental demands without imposing strict regulations or making polluting consumption more expensive. Citizens/consumers often prefer the environmental quality of their own country to the environmental impact of goods produced abroad. This contributes to the relocation of polluting industries to countries with a priority for economic growth and weaker regulations. Research confirms that democracies actually "outsource" more of the environmental impacts of consumption to other countries compared to less or undemocratic countries that are more likely to “onsource” [9, 10, 17, 18, 25, 28 (references)].

The main contribution of the study lies in the analysis, To what extent is pollution shifting from democratic countries associated with lower pollution within their own territory?The empirical focus was on climate change mitigation, examining greenhouse gas emissions. Analysis of data for more than 160 countries from the 1990s to 2015 showed that Pollution shifting contributes to a better environmental balance of democracies in the form of lower levels of greenhouse gas emissions on their territory. This relationship was statistically significant and negatively signified, suggesting that outsourcing environmental degradation is associated with lower emissions within democracies. The simulations showed that as pollution leakage increases from its minimum to its maximum, expected greenhouse gas emissions were about 1.75 metric tons per capita lower in more democratic countries compared to less democratic countries, where the effect was weaker (about -0.75). Compared to less democratic countries, emissions were 1.01 metric tons per capita lower in more democratic regimes as pollution leakage increases. The effect of pollution leakage on domestic emissions is more pronounced at medium and higher levels of democracy. These main findings were consistent and robust across a variety of additional analyses.

From a policy perspective, the main implication of the findings is that Democracies, especially high-income ones, should reorient their environmental policies from primarily territorial to the global environmental impacts of their domestic economic activity. The results also clearly challenge the often-claimed “moral superiority” of democracies over autocracies in terms of environmental outcomes. The observation that the global environmental impacts of consumption are larger for democracies than the territorial impacts of production opens up normative debates about the responsibility of countries for the environmental impacts of consumption abroad. Spring

The research article was published on journals.plos.org

Glossary of key terms

• Pollution offshoring: Outsourcing the environmental impacts of consumption to other countries, often through international trade, where polluting production takes place in exporting countries.
• Democracy-environment nexus: The relationship between the form of political regime (democracy vs. autocracy) and environmental performance or environmental quality.
• Greenhouse gas emissions: Gases in the atmosphere that absorb and emit radiation in the thermal infrared range, causing the greenhouse effect and global warming. In the article, they include CO₂, methane, nitrogen oxides, and fluorinated gases.
• Environmental Kuznets Curve (EKC): A hypothetical relationship between per capita income and environmental degradation, where degradation initially increases with income growth but then decreases as the economy continues to develop and reaches higher income levels.
• Varieties of Democracy (V-Dem): A research project that provides a large database of measurements of various aspects of democracy and governance for a wide range of countries and historical periods. The article uses the index of "electoral democracy".
• Multi-regional input-output (MRIO): A methodology and database used to track global trade flows and calculate the environmental and social impacts associated with consumption and production in different regions of the world.
• Monadic analysis: An analysis that focuses on individual countries as the unit of analysis, as opposed to dyadic analysis, which examines relationships between pairs of countries.
• Territorial emissions: Greenhouse gas emissions that occur within the geographical boundaries of a given country as a result of its production activities.
• Consumption-based carbon footprint: Total greenhouse gas emissions associated with the consumption of goods and services in a given country, regardless of where these emissions were produced.
• OLS regression models (Ordinary Least Squares regression models): Statistical models used to estimate the relationship between a dependent variable and one or more independent variables.
• Time-series cross-sectional data: A data type that combines observations of multiple units (countries) over time.
• Year fixed effects: A statistical method used to control for global or time-specific shocks that affect all countries in a given year.
• Interaction term: In a regression model, a term that represents the joint effect of two or more independent variables on a dependent variable, which differs from the simple sum of their individual effects. The paper examines the interaction between foreign pollution and democracy.
• Marginal effects: A change in the dependent variable associated with a unit change in one of the independent variables, while the other variables are held constant. The paper examines the marginal effects of foreign pollution at different levels of democracy.