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Optimal Pollution Standard in an Open Economy: Characterizing Environmental Diversity

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  • Das, Satya P

Abstract

The paper examines the optimal pollution standard for a large open economy. Using a two-country partial-equilibrium framework, the optimal standards are characterized for autarky, free trade, and free trade together with cooperation among countries in setting standards. If pollution is local, at the free-trade equilibrium, the exporting country imposes a stricter standard than does the importing country. The ranking may be reversed if pollution is transnational. A surprising implication is that if pollution is local, cooperation may imply a less stringent standard for both the exporting country and the importing country. Copyright 2001 by Blackwell Publishing Ltd.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Review of International Economics.

Volume (Year): 9 (2001)
Issue (Month): 3 (August)
Pages: 429-42

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Handle: RePEc:bla:reviec:v:9:y:2001:i:3:p:429-42

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Cited by:
  1. Meeta Mehra & Satya Das, 2008. "North–South Trade and Pollution Migration: The Debate Revisited," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 40(1), pages 139-164, May.

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