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The objective of this paper is to determine the impact of international trade on environment. Theoretically, international trade raise ambiguities regarding the impact of international trade on environment, specifically in countries like Bahrain. Such kind of countries uses international trade to boosting economic growth. However, international trade may influence the environment. To estimate whether and how international trade influence the environment in Bahrain, this study employs time series data of 26 years. Using ARDL approach we estimated the impact of international trade on environment. Results indicate that in context of Bahrain, international trade significantly influences the environment in the long run. We can say that long run relationship exist among international trade and environment in context of Bahrain. Based upon our findings, it is suggested that an environmental regulation policy should be concerned to eliminate or minimize the environmental impact of international trade. However, the policy should be enforced with adequate consideration. Too strict environmental policy may lead to economic contraction.

International Trade and its Impact on CO2 Emission: Empirical Study of Bahrain