The long-run effects of environmental reform in open economies
AbstractWe compare the short-run and long-run effects of environmental reform and harmonization under autarky and free trade. When trade is driven by environmental distortions rather than real relative advantages, harmonization of environmental policies, even if achieved by lowering standards in one country, can improve short-run aggregate welfare. With the possibility of multiple steady states, long-run considerations favor a \race to the top" rather than a \race to the bottom" even when upward and downward harmonizations are equivalent in the short run. For a country trapped in a low (or bad) steady state, environmental reform may not move it to a high (or good) steady state under autarky. However, under trade, harmonization of policies may enable this country to reach the high steady state. Conversely, reforms that increase the relative differences in distortions may, under trade, cause economies to move toalow steady state.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Environmental Economics and Management.
Volume (Year): 45 (2003)
Issue (Month): 2 (March)
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Web page: http://www.elsevier.com/locate/inca/622870
Other versions of this item:
- Karp, Larry & Zhao, Jinhua & Sacheti, Sandeep, 2000. "The Long-Run Effects of Environmental Reform in Open Economies," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt0bm6h9ct, Department of Agricultural & Resource Economics, UC Berkeley.
- Karp, Larry S. & Zhao, Jinhua & Sacheti, Sandeep, 2000. "The long-run effects of environmental reform in open economies," CUDARE Working Paper Series 818, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Karp, Larry & Sacheti, Sandeep & Zhao, Jinhua, 1999.
"Common ground between free-traders and environmentalists,"
Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series
qt7jw3t8pw, Department of Agricultural & Resource Economics, UC Berkeley.
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- Zhao, Jinhua & Karp, Larry & Sacheti, Sandeep, 2001. "Common Ground Between Free-Traders and Environmentalists," Staff General Research Papers 5138, Iowa State University, Department of Economics.
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"Property rights, mobile capital, and comparative advantage,"
CUDARE Working Paper Series
942, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
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- Karp, Larry, 2004. "Property Rights, Mobile Capital, and Comparative Advantage," Institute for Research on Labor and Employment, Working Paper Series qt41h0b5v5, Institute of Industrial Relations, UC Berkeley.
- Karp, Larry, 2003. "Property rights, mobile capital, and comparative advantage," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt4jt9j6dn, Department of Agricultural & Resource Economics, UC Berkeley.
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