Reassessment of industrialization phenomenon in terms of pollution haven hypothesis and enviromental taxes

The relationship between environment, trade and growth has become very complicated over the years. Trade affecting the structure of national economy has an important role on both economic growth and efficiency of resources uses. Besides, there is a demand rise on environmental services through increasing growth. Therefore it has caused high life standards. However, there are a number of studies assuming that the relationship between environment and trade is not always positive. It has been also argued that the environmental problems are derived from mostly growth based on trade. Increasing economical activities and free traderesult in excessive resources use while these may cause deviation of economical efficiency. At the same time, these can cause the application of low environmental standards in order to decrease the costs of countries. In this case, environmental taxes becomevery popular for internalizing externalities bringing about environmental pollution. This study consists of four main parts: In the first part, it has been shown environmental economy in the field of economical thoughs history. Then the relationship between the environment and sustainable development has been explained by various indicators.While explaining the economical reasons of environmental problems, the relationship between growth-environment and the relationship between free trade-environment has been described.In the second part, microeconomic solutions for environmental problems have been explained. The taxes for external costs based on environmental problems have been also mentioned. Some information about the environmental taxes which are applied in the OECD countries and Turkey has been given. In the third part, the methods which have used in the analysis, Panel Cointegration Tests and Panel Causality Tests have been introduced. The fourth part has been investigated both the effects of growth and trade openness on enviromental pollution and the effects of growth and enviromental taxes on enviromental pollution. Also, the date regarding Kyoto Protocol has been used as a dummy variable in order to test validity of the effect of Kyoto Protocol on enviromental pollution. The findings indicate that the presence of Pollution Haven Hypothesis is supported. Additionally, it is concluded that enviromental pollution has decreased in developed countries whereas it has increased in developing and less developed countries. Also, the results show that Kyoto Protocol leads to different results among signed and not signed countries. In the conclusion of the study, policy recommendations have been made based on research findings.