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Trade, politics, and the environment: Tailpipe vs. smokestack

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  • McAusland, Carol

Abstract

Economists interested in the interaction between trade, politics and the environ-ment have restricted their attention almost exclusively to the problem of production related—“smokestackâ€â€”pollution. We instead consider consumption related—“tailpipeâ€â€”pollution and show that this can reverse a number of core results. For example, we show that the impact of regulation on trade patterns depends on the type of pollution being regulated: while strict smokestack regula-tion dampens exports of pollution intensive goods, tailpipe regulation may promote these exports. Similarly, we show that pollution type may fundamentally alter the impact of openness on political opposition to environmental regulation: while openness may make dirty industry oppose smokestack regulation more vociferously, it can make industry a less ardent enemy of tailpipe regulation.

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Bibliographic Info

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

Volume (Year): 55 (2008)
Issue (Month): 1 (January)
Pages: 52-71

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Handle: RePEc:eee:jeeman:v:55:y:2008:i:1:p:52-71

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

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References

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  1. Fredriksson, Per G., 1997. "The Political Economy of Pollution Taxes in a Small Open Economy," Journal of Environmental Economics and Management, Elsevier, vol. 33(1), pages 44-58, May.
  2. Bengt Kristrom & Pere Riera, 1996. "Is the income elasticity of environmental improvements less than one?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 7(1), pages 45-55, January.
  3. Deacon, Robert & Norman, Catherine S, 2004. "Is the environmental Kuznets curve an empirical regularity?," University of California at Santa Barbara, Economics Working Paper Series qt2m44f7kr, Department of Economics, UC Santa Barbara.
  4. Lopez Ramon, 1994. "The Environment as a Factor of Production: The Effects of Economic Growth and Trade Liberalization," Journal of Environmental Economics and Management, Elsevier, vol. 27(2), pages 163-184, September.
  5. Bommer, Rolf & Schulze, Gunther G., 1999. "Environmental improvement with trade liberalization," European Journal of Political Economy, Elsevier, vol. 15(4), pages 639-661, November.
  6. Saul H. Hymans, 1970. "Consumer Durable Spending: Explanation and Prediction," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 1(2), pages 173-206.
  7. Krutilla, Kerry, 1991. "Environmental regulation in an open economy," Journal of Environmental Economics and Management, Elsevier, vol. 20(2), pages 127-142, March.
  8. Swee Chua, 2003. "Does tighter environmental policy lead to a comparative advantage in less polluting goods?," Oxford Economic Papers, Oxford University Press, vol. 55(1), pages 25-35, January.
  9. Schleich, Joachim, 1999. "Environmental quality with endogenous domestic and trade policies1," European Journal of Political Economy, Elsevier, vol. 15(1), pages 53-71, March.
  10. Susmita Dasgupta & Ashoka Mody & Subhendu Roy & David Wheeler, 2001. "Environmental Regulation and Development: A Cross-country Empirical Analysis," Oxford Development Studies, Taylor & Francis Journals, vol. 29(2), pages 173-187.
  11. McAusland, Carol, 2005. "Harmonizing tailpipe policy in symmetric countries: Improve the environment, improve welfare?," Journal of Environmental Economics and Management, Elsevier, vol. 50(2), pages 229-251, September.
  12. Deacon, Robert, 1999. "The Political Economy of Environment-Development Relationships: A Preliminary Framework," University of California at Santa Barbara, Economics Working Paper Series qt8h33b5c0, Department of Economics, UC Santa Barbara.
  13. Daniel J. Graham & Stephen Glaister, 2002. "The Demand for Automobile Fuel: A Survey of Elasticities," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 36(1), pages 1-25, January.
  14. Buchanan, James M & Tullock, Gordon, 1975. "Polluters' Profits and Political Response: Direct Controls Versus Taxes," American Economic Review, American Economic Association, vol. 65(1), pages 139-47, March.
  15. repec:fth:calaec:11-99 is not listed on IDEAS
  16. Robert S. Pindyck, 1979. "The Structure of World Energy Demand," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262661772, December.
  17. Damania, Richard & Fredriksson, Per G. & List, John A., 2003. "Trade liberalization, corruption, and environmental policy formation: theory and evidence," Journal of Environmental Economics and Management, Elsevier, vol. 46(3), pages 490-512, November.
  18. McAusland, Carol, 2003. "Voting for pollution policy: the importance of income inequality and openness to trade," Journal of International Economics, Elsevier, vol. 61(2), pages 425-451, December.
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Citations

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Cited by:
  1. Lucas W. Davis & Matthew E. Kahn, 2008. "International Trade in Used Durable Goods: The Environmental Consequences of NAFTA," NBER Working Papers 14565, National Bureau of Economic Research, Inc.
  2. Frankel, Jeffrey, 2009. "Environmental Effects of International Trade," Working Paper Series rwp09-006, Harvard University, John F. Kennedy School of Government.
  3. Soham Baksi, 2014. "Regional versus Multilateral Trade Liberalization, Environmental Taxation, and Welfare," Canadian Journal of Economics, Canadian Economics Association, vol. 47(1), pages 232-249, February.
  4. M. Scott Taylor, 2007. "Buffalo Hunt: International Trade and the Virtual Extinction of the North American Bison," NBER Working Papers 12969, National Bureau of Economic Research, Inc.
  5. Gori, Giuseppe Francesco & Lambertini, Luca, 2013. "Trade liberalisation between asymmetric countries with environmentally concerned consumers," Regional Science and Urban Economics, Elsevier, vol. 43(4), pages 549-560.
  6. Kellenberg, Derek, 2012. "Trading wastes," Journal of Environmental Economics and Management, Elsevier, vol. 64(1), pages 68-87.
  7. Shahbaz, Muhammad & Ozturk, Ilhan & Afza, Talat & Ali, Amjad, 2013. "Revisiting the Environmental Kuznets Curve in a Global Economy," MPRA Paper 46610, University Library of Munich, Germany, revised 23 Apr 2013.
  8. Gregmar Galinato, . "The Challenge of Addressing Consumption Pollutants with Fiscal Policy," Working Papers 2014-1, School of Economic Sciences, Washington State University.
  9. Copeland, Brian R., 2012. "International trade and green growth," Policy Research Working Paper Series 6235, The World Bank.
  10. Islam, Asif M. & López, Ramón E., 2013. "Government Spending and Air Pollution in the US," Working Papers 144406, University of Maryland, Department of Agricultural and Resource Economics.

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