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Vertical structure and strategic environmental trade policy

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  • Hamilton, Stephen F.
  • Requate, Till

Abstract

The idea that environmental trade policy may be used to achieve competitive advantage in international markets has important implications for the way we conceive tree-trade. This paper reconsiders the issue of strategic environmental policy in a model that makes explicit the vertical structure that supports production of the traded good. We find these intranational vertical relationships to have a substantial qualitative effect on the optimal strategic environmental trade policy. We show that under both quantity and price competition in the international market, the optimal policy to levy on the polluting input when vertical contracts are allowed is a Pigouvian tax.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Environmental Economics and Management.

Volume (Year): 47 (2004)
Issue (Month): 2 (March)
Pages: 260-269

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Handle: RePEc:eee:jeeman:v:47:y:2004:i:2:p:260-269

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Web page: http://www.elsevier.com/locate/inca/622870

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References

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Citations

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Cited by:
  1. Keisuke Kawata & Yasunori Ouchida, 2013. "Offshoring, trade and environmental policies: Effects of transboundary pollution," IDEC DP2 Series, Hiroshima University, Graduate School for International Development and Cooperation (IDEC) 3-8, Hiroshima University, Graduate School for International Development and Cooperation (IDEC).
  2. Keisuke Hattori, 2010. "Strategic Voting for Noncooperative Environmental Policies in Open Economies," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 46(4), pages 459-474, August.
  3. Zylicz, Tomasz, 2010. "Goals and Principles of Environmental Policy," International Review of Environmental and Resource Economics, now publishers, now publishers, vol. 3(4), pages 299-334, May.
  4. Shuichi Ohori, 2012. "Environmental Tax and Public Ownership in Vertically Related Markets," Journal of Industry, Competition and Trade, Springer, Springer, vol. 12(2), pages 169-176, June.
  5. Kellenberg, Derek K., 2009. "An empirical investigation of the pollution haven effect with strategic environment and trade policy," Journal of International Economics, Elsevier, Elsevier, vol. 78(2), pages 242-255, July.
  6. Hajime Sugeta & Takayoshi Shinkuma, 2012. "International trade in recycled materials in vertically related markets," Environmental Economics and Policy Studies, Society for Environmental Economics and Policy Studies - SEEPS, Society for Environmental Economics and Policy Studies - SEEPS, vol. 14(4), pages 357-382, October.
  7. Idrissa Sibailly, 2013. "On the Pigouvian Tax Rule in an Open Economy: Opening the Gate to the Eco-industry," Working Papers, HAL hal-00911464, HAL.
  8. Joan Canton, 2007. "Redealing the Cards: How the Presence of an Eco-Industry Modifies the Political Economy of Environmental Policies," Working Papers, Fondazione Eni Enrico Mattei 2007.25, Fondazione Eni Enrico Mattei.
  9. Alain-Désiré Nimubona, 2010. "Pollution Policy and Liberalization of Trade in Environmental Goods," Working Papers, University of Waterloo, Department of Economics 1004, University of Waterloo, Department of Economics, revised May 2010.
  10. Alain-Désiré Nimubona, 2012. "Pollution Policy and Trade Liberalization of Environmental Goods," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 53(3), pages 323-346, November.
  11. Joan Canton & Antoine Soubeyran & Hubert Stahn, 2008. "Environmental Taxation and Vertical Cournot Oligopolies: How Eco-industries Matter," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 40(3), pages 369-382, July.
  12. Requate, Till, 2005. "Environmental Policy under Imperfect Competition : A Survey," Economics Working Papers, Christian-Albrechts-University of Kiel, Department of Economics 2005,12, Christian-Albrechts-University of Kiel, Department of Economics.

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