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The Effect of NAFTA on Energy and Environmental Efficiency in Mexico

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In this paper, I ask whether entry into NAFTA has made Mexico more or less like the United States and Canada in terms of pollution per capita and per dollar of GDP; what has happened to the trends in the various indicators; and what the consequent effects on environmental quality have been. Energy use and emissions of carbon dioxide, sulfur dioxide and nitrogen oxides are examined using a variety of econometric tests and models. The results show that the extreme predictions of the outcomes of NAFTA have not materialized. Rather, trends that were already present before the introduction of NAFTA continue, and in some cases improve somewhat, post-NAFTA.

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