Ellen Tsaprailis, June 2, 2022
Photo credit: Lindsay Ralph

New Canada Research Chair to Study Economic Factors Affecting Pollution from Manufacturing Sector

Jevan Cherniwchan is the new Canada Research Chair in Economics of Sustainability and Globalization at Carleton University.

The focus of Cherniwchan’s research is to decipher the reasons why pollution from the manufacturing sectors of advanced economies has fallen dramatically in recent decades.

“The amount of pollution being generated per unit of output in the manufacturing sector is falling. Pollution from manufacturing has decreased significantly, while output has gone up,” says Cherniwchan. “The main thrust of my research is to understand the causes and some of the consequences of this cleanup of manufacturing.”

Why manufacturing is getting cleaner remains a puzzle. Cherniwchan says there are a number of hypotheses that could explain this phenomenon, such as international trade shifting dirty production to developing countries, new technologies, changes in consumers’ buying preferences or changes in environmental regulations.

“We’ve learned that most pollution is really harmful for human health, so we’ve enacted policies to try and reduce it. It could be changes in technology, as we’ve gotten better at producing things and emit less waste as a byproduct,” says Cherniwchan.

Teaching and Collaborating with Graduate Students
A Department of Economics Associate Professor as well, Cherniwchan started at Carleton in January 2021, after having taught at the University of Alberta’s business school for seven years. He was attracted to make the move to be able to collaborate with graduate students and be closer to Statistics Canada with whom he has a close working relationship.

“Edmonton was home but being located in Ottawa, Carleton provides many opportunities for my research program,” says Cherniwchan. “It’s nice not to have to fly to access data anymore.”

He’s excited to help guide students with their research and develop their ideas. One of the graduate courses Cherniwchan will be teaching this fall is directly related to his work as a Canada Research Chair.

“The course will examine the interaction between international trade and environmental outcomes. We will investigate how international trade affects the environment and how the policies we typically use to improve environmental quality interact with firm competitiveness and opportunities to export and compete in international markets,” says Cherniwchan.

“It is great to be able to teach students about research at the forefront of our understanding and it is a nice complement to my own work. When I’m trying to explain research findings to students, it offers an opportunity to reflect on what we know and often stimulates new ideas.”

Pollution Falling Because Dirty Production Going Elsewhere?
Cherniwchan says there is some evidence that individual firms are changing how they are manufacturing and outsourcing some of their dirty production. However, testing whether dirty production is being outsourced is difficult given that data which provides information on both the pollution emitted and productive activities of firms is difficult to come by.

“We have fairly stringent environmental regulations and how companies respond to these regulations has always been a big policy concern. Many debates simply take the relocation of dirty production abroad as a given. But this is an empirical question, and we need to take a look at the data. It turns out that Canada is somewhat unique in that we actually have the data that allows us to answer this type of question,” says Cherniwchan. “These debates are getting more heated, particularly now when we’re thinking about climate change and using policy to reduce domestic greenhouse gas emissions. Debates over these policies often focus on international trade; the worry is that if we start trading with many developing countries that don’t have stringent environmental regulations then we are going to lose jobs because production will relocate abroad.”

The extent to which this is happening is not very clear yet.

“I don’t think we have enough evidence to really know how important this phenomenon is,” says Cherniwchan. “My plan as a Canada Research Chair is to continue exploring this issue, and try to understand what is going on.”

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