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Our study illuminates the impact of international trade on environmental quality in lower-middle-income countries by using CO 2  emission as the proxy for environmental degradation. Using the Pooled Mean Group estimation along with validity tests, the results show that in the long run, CO 2  emission is affected by merchandise export, merchandise import, FDI, GDP per capita, and renewable energy consumption. The impact of trade on CO 2  emission is mixed because our findings show that merchandise export and import have opposite effects. In addition, our results reveal that Environmental Kuznets Curve exists in the long run with N-sharped. The increase in GDP per capita leads to the raise of CO 2  emission at first, but later comes the decrease and then increase. The paper has relevant implications for law makers.

The Impact of International Trade on Environmental Quality: Implications for Law