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Trade reform and environmental externalities in general equilibrium: analysis for an archetype poor tropical country


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  • L PEZ, RAM N
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    This paper provides a conceptual and empirical general equilibrium framework for the analysis of the impact of trade reform on welfare and the environment. The analysis is applied to C te d Ivoire explicitly considering externalities affecting biomass (natural vegetation), which is shown to be an important factor determining agricultural productivity.The simulation general equilibrium analysis shows that the agricultural output composition effect dominates the agricultural expansion effect for the case of complete trade liberalization. Thus, in this case trade liberalization causes a significant improvement in the rural biomass stock by cutting land area cultivated, increases agricultural productivity, and induces dramatic welfare gains. That is, trade liberalization is a win win type of policy in this case. However, partial trade liberalization that only reduces protection to non-agricultural goods (and does not reduce tariffs to agricultural import substitutes and does not reduce export taxes) causes a further deterioration of the biomass resources and reduces welfare.

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    Bibliographic Info

    Article provided by Cambridge University Press in its journal Environment and Development Economics.

    Volume (Year): 5 (2000)
    Issue (Month): 04 (October)
    Pages: 377-404

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    Handle: RePEc:cup:endeec:v:5:y:2000:i:04:p:377-404_00

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    Cited by:
    1. Toma, Luiza & Ashworth, Cheryl J. & Stott, Alistair W., 2008. "A Partial Equilibrium Model Of The Linkages Between Animal Welfare, Trade And The Environment In Scotland," 109th Seminar, November 20-21, 2008, Viterbo, Italy, European Association of Agricultural Economists 44825, European Association of Agricultural Economists.
    2. Wurtenberger, Laura & Koellner, Thomas & Binder, Claudia R., 2006. "Virtual land use and agricultural trade: Estimating environmental and socio-economic impacts," Ecological Economics, Elsevier, Elsevier, vol. 57(4), pages 679-697, June.
    3. Anriquez, Gustavo, 2002. "Trade And The Environment: An Economic Literature Survey," Working Papers, University of Maryland, Department of Agricultural and Resource Economics 28598, University of Maryland, Department of Agricultural and Resource Economics.
    4. Pranab Bardhan, 2006. "Globalization, Inequality, and Poverty," IDB Publications 9126, Inter-American Development Bank.
    5. Galinato, Gregmar I. & Galinato, Suzette P., 2013. "The short-run and long-run effects of corruption control and political stability on forest cover," Ecological Economics, Elsevier, Elsevier, vol. 89(C), pages 153-161.
    6. Toman, Michael, 2003. "The Roles of the Environment and Natural Resources in Economic Growth Analysis," Discussion Papers, Resources For the Future dp-02-71, Resources For the Future.
    7. Bardhan, Pranab, 2006. "Globalization and rural poverty," World Development, Elsevier, Elsevier, vol. 34(8), pages 1393-1404, August.
    8. LeClair, Mark S. & Franceschi, Dina, 2006. "Externalities in international trade: The case for differential tariffs," Ecological Economics, Elsevier, Elsevier, vol. 58(3), pages 462-472, June.
    9. Bentry Mkwara & Dan Marsh, 2009. "The Links between Poverty and the Environment in Malawi," Working Papers in Economics, University of Waikato, Department of Economics 09/10, University of Waikato, Department of Economics.
    10. Gregmar Galinato & Suzette Galinato, 2010. "The Effects of Corruption Control and Political Stability on the Environmental Kuznets Curve of Deforestation-Induced Carbon Dioxide Emissions," Working Papers, School of Economic Sciences, Washington State University 2010-9, School of Economic Sciences, Washington State University.


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