Environmental Policy in Open Economies and Monopolistic Competition
AbstractThis paper analyses the implications of international trade for non-cooperative environmental policy in the case of local production externalities. A particular focus is on the potential effects of regulations on the variety of goods and the resulting international spillover caused by trade. A tougher domestic standard negatively affects the utility of the households abroad, since such a policy reduces their variety of imports (due to fewer domestic product inventions) or their consumption of each imported brand (due to higher import prices). Ignoring the negative spillover, non-cooperative governments implement inefficiently strict standards in equilibrium. In contrast to this clear-cut inefficiency result, the impact of international trade on the state of the environment is ambiguous. Copyright Springer 2006
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Bibliographic InfoArticle provided by European Association of Environmental and Resource Economists in its journal Environmental & Resource Economics.
Volume (Year): 33 (2006)
Issue (Month): 2 (02)
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Web page: http://www.springerlink.com/link.asp?id=100263
environmental policy; international trade; monopolistic competition; open economies; process standards; Q28; F13; F12;
Find related papers by JEL classification:
- Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
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- Kreickemeier, Udo & Richter, Philipp M., 2012.
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