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On trade liberalization and transboundary pollution

Author

Listed:
  • Soham Baksi

    (University of Winnipeg)

  • Amrita Ray chaudhuri

    (CentER, TILEC, Tilburg University)

Abstract

We examine the impact of freer trade on equilibrium pollution tax and welfare when markets are imperfectly competitive and pollution is transboundary. In the symmetric case, bilateral tariff reduction (i) strengthens environmental protection if and only if pollution is sufficiently harmful, and (ii) decreases welfare in the neighbourhood of free trade.

Suggested Citation

  • Soham Baksi & Amrita Ray chaudhuri, 2009. "On trade liberalization and transboundary pollution," Economics Bulletin, AccessEcon, vol. 29(4), pages 2605-2612.
    • Handle: RePEc:ebl:ecbull:eb-09-00376
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    File URL: http://www.accessecon.com/Pubs/EB/2009/Volume29/EB-09-V29-I4-P13.pdf
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    References listed on IDEAS

    as
    1. Brander, James & Krugman, Paul, 1983. "A 'reciprocal dumping' model of international trade," Journal of International Economics, Elsevier, vol. 15(3-4), pages 313-321, November.
    2. Werner Antweiler & Brian R. Copeland & M. Scott Taylor, 2001. "Is Free Trade Good for the Environment?," American Economic Review, American Economic Association, vol. 91(4), pages 877-908, September.
    3. Burguet, Roberto & Sempere, Jaume, 2003. "Trade liberalization, environmental policy, and welfare," Journal of Environmental Economics and Management, Elsevier, vol. 46(1), pages 25-37, July.
    4. Kennedy Peter W., 1994. "Equilibrium Pollution Taxes in Open Economies with Imperfect Competition," Journal of Environmental Economics and Management, Elsevier, vol. 27(1), pages 49-63, July.
    5. Josh Ederington & Jenny Minier, 2003. "Is environmental policy a secondary trade barrier? An empirical analysis," Canadian Journal of Economics, Canadian Economics Association, vol. 36(1), pages 137-154, February.
    6. Krutilla, Kerry, 1991. "Environmental regulation in an open economy," Journal of Environmental Economics and Management, Elsevier, vol. 20(2), pages 127-142, March.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Al Khourdajie, Alaa & Finus, Michael, 2020. "Measures to enhance the effectiveness of international climate agreements: The case of border carbon adjustments," European Economic Review, Elsevier, vol. 124(C).
    2. Charles F. Mason & Victoria I. Umanskaya & Edward B. Barbier, 2018. "Trade, Transboundary Pollution, and Foreign Lobbying," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 70(1), pages 223-248, May.
    3. Takeshi Iida & Kenji Takeuchi, 2011. "Does free trade promote environmental technology transfer?," Journal of Economics, Springer, vol. 104(2), pages 159-190, October.
    4. Soham Baksi, 2014. "Regional versus Multilateral Trade Liberalization, Environmental Taxation, and Welfare," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 47(1), pages 232-249, February.
    5. Lidia Vidal-Meliá & Eva Camacho-Cuena & Miguel Ginés-Vilar, 2019. "Market size asymmetry and industrial policy in an international duopoly: Environmental tax vs. production subsidy," Working Papers 2019/01, Economics Department, Universitat Jaume I, Castellón (Spain).
    6. Alain-Désiré Nimubona, 2012. "Pollution Policy and Trade Liberalization of Environmental Goods," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 53(3), pages 323-346, November.
    7. Kenji Fujiwara, 2011. "Market Integration and Competition in Environmental and Trade Policies," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 49(4), pages 561-572, August.
    8. Takeshi Iida & Kenji Takeuchi, 2010. "Policy-Induced Environmental Technology Transfer," Discussion Papers 1008, Graduate School of Economics, Kobe University.
    9. Bruno Nkuiya, 2013. "Trade Structure, Transboundary Pollution and Multilateral Trade Liberalization: The Effects on Environmental Taxes and Welfare," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 55(3), pages 337-355, July.

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    More about this item

    Keywords

    Transboundary pollution; Strategic environmental policy; Bilateral trade liberalization;
    All these keywords.

    JEL classification:

    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • F1 - International Economics - - Trade

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