Global Pollution: A Heckscher-Ohlin-Samuelson Model of Pigouvian Taxation
AbstractIt could be inferred from the externality literature that, in the absence of lump sum transfers between countries, global Pigouvian taxation would make pollution-intensive countries worse-off. This paper uses the "strong version" of the Heckscher-Ohlin-Samuelson model to demonstrate that a uniform Pigouvian tax shifts the terms-of-trade in favor of the polluting good so that on balance a more polluting country could be better-off and a less polluting country worse-off. This result is consistent with some empirical observations on environmental policy in industrialized countries as compared with that in newly developing countries.
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Bibliographic InfoArticle provided by Eastern Economic Association in its journal Eastern Economic Journal.
Volume (Year): 17 (1991)
Issue (Month): 3 (Jul-Sep)
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Externality; Heckscher Ohlin; Lump Sum Transfer; Pigouvian Tax; Polluting; Pollution; Tax; Taxation; Terms of Trade; Trade;
Find related papers by JEL classification:
- Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
- Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
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