Multilateral trade and environmental reforms in a polluted open economy
This paper presents welfare-improving reforms for a polluted open economy aiming to reduce distortions from the use of trade and pollution taxes applied at a sub-optimal level. Using a general equilibrium model where two final goods are produced using an intermediate pollutant input and traded with a foreign country, the domestic economy chooses trade and environmental policies optimally. Terms of trade effects are key to finding that free trade and non-zero pollution taxes are the directions for multilateral welfare-improving reforms.
Beghin, J., D. Roland-Holst, and D. Mensbrugghe. 1997. Trade and pollution linkages: piecemeal reform and optimal intervention, The Canadian Journal of Economics, 30(2): 442-455.
Burguet, R. and J. Sempere. 2003. Trade liberalization, environmental policy, and welfare, Journal of Environmental Economics and Management, 46(1): 25-37.
Copeland, B. 1994. International trade and the environment: policy reform ina polluted small open economy, Journal of Environmental Economics and Management, 26(1): 44-65.
Copeland, B. and M. Taylor. 2001. International trade and environment: a framework for analysis, NBER Working Paper Series, no. 8540.
Copeland, B. and M. Taylor. 2003. Trade and the Environment, Princeton, NJ: Princeton University Press.
Copeland, B. and M. Taylor. 2004. Trade, growth, and the environment, Journal of Economic Literature, 42(1): 7-71.
Dixit, A. and V. Norman. 1980. Theory of International Trade, Welwyn: J. Nisbet.
Dixit, A. 1984. International trade policy for oligopolistic industries, The Economic Journal, 94(376a): 1-161.
Fullerton, D. 2006. The Economics of Pollution Havens, Cheltenham, UK: Edward Elgar.
Gallegos, A. 2006. Optimal trade and environmental policies in a polluted small open economy, Estudios Económicos, 21(2): 203-231.
Hatta, T. 1977. A Theory of piecemeal policy recommendations, Review of Economic Studies, 44: 1-21.
Taylor, M. 2005. Unbundling the pollution haven hypothesis, The B.E. Journal of Economic Analysis & Policy, 3(2): 1-28.
Turunen-Red, A., and A. D. Woodland. 2001. The anatomy of multilateral trade policy reform, in Sajal Lahiri (ed.), Regionalism and Globalization: Theory and Practice, London: Routledge.
Turunen-Red, A., and A. D. Woodland. 2004. Multilateral reforms of trade and environmental policy, Review of International Economics, 12(3): 321-336.
- Abstract viewed - 312 times
- PDF downloaded - 153 times
- XML downloaded - 0 times