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International Trade and the Environment: Theoretical and Policy Linkages

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  • J. Neary

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Abstract

I review and extend three approaches to trade and environmental policies: competitive general equilibrium, oligopoly and monopolistic competition. The first two have surprisingly similar implications: deviations from first-best rules are justified only by constraints on policy choice (which motivates what I call a “single dividend” approach to environmental policy), and taxes and emissions standards differ in ways which reflect the Le Chatelier principle. I also show how environmental taxes may lead to a catastrophic relocation of industry in the presence of agglomeration effects, although not necessarily if there is a continuum of industries which differ in pollution intensity. Copyright Springer 2006

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Bibliographic Info

Article provided by European Association of Environmental and Resource Economists in its journal Environmental & Resource Economics.

Volume (Year): 33 (2006)
Issue (Month): 1 (01)
Pages: 95-118

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Handle: RePEc:kap:enreec:v:33:y:2006:i:1:p:95-118

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Web page: http://www.springerlink.com/link.asp?id=100263

Related research

Keywords: environmental policy; international trade policy; location and economic geography; pollution abatement; strategic trade policy; O13; L13; F12;

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