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Trade policy and ecology

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  • Carl-Erik Schulz

Abstract

Trade sanctions on product exports are often used as measures for conservation of stocks of living resources. Two opposing approaches are investigated. The harvest approach argues that sanctions reduce the harvest, and thus protects the stock. It is shown that this does not consider the long run effects nor the effects of sanctions on the management system. The investment approach argues that increased price protects the stock, making the species a profitable investment. It is shown that this approach does not consider the asset effects of price changes, and that the sanctions usually increase the stock in an one species analysis. If the wildlife competes for land the conclusions may be different, but still sanctions usually works. If the manager has a joint management of several species, the stock effects of sanctions are ambiguous, depending on both the species interaction, and the profitability of the harvesting from each of them. In this case it is not possible to use intuitive reasoning, sanctions give distortions to all stocks simultaneously. The threat of extinction depends crucially on the unit cost in harvesting of depleted stocks. The paper concludes that trade policy is a too general measure for the management of living resources, and may implicate important economic distortions to the ecological system. Copyright Kluwer Academic Publishers 1996

Suggested Citation

  • Carl-Erik Schulz, 1996. "Trade policy and ecology," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 8(1), pages 15-38, July.
    • Handle: RePEc:kap:enreec:v:8:y:1996:i:1:p:15-38
    DOI: 10.1007/BF00340651
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    References listed on IDEAS

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    Cited by:

    1. Erwin Bulte & Edward Barbier, 2005. "Trade and Renewable Resources in a Second Best World: An Overview," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 30(4), pages 423-463, April.
    2. Nielsen, Max, 2006. "Trade liberalisation, resource sustainability and welfare: The case of East Baltic cod," Ecological Economics, Elsevier, vol. 58(3), pages 650-664, June.
    3. Bulte, Erwin H. & Horan, Richard D., 2003. "Habitat conservation, wildlife extraction and agricultural expansion," Journal of Environmental Economics and Management, Elsevier, vol. 45(1), pages 109-127, January.
    4. Horatiu Rus, 2014. "Corruption, conflict and the management of natural resources," Economics of Governance, Springer, vol. 15(4), pages 355-386, November.
    5. Bulte, Erwin H. & van Kooten, G. Cornelis, 2001. "Harvesting and conserving a species when numbers are low: population viability and gambler's ruin in bioeconomic models," Ecological Economics, Elsevier, vol. 37(1), pages 87-100, April.
    6. Sotelsek, Daniel F. & Azqueta Oyarzún, Diego, 1999. "Comparative advantages and the exploitation of environmental resources," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    7. Naoto Jinji, 2006. "International trade and terrestrial open-access renewable resources in a small open economy," Canadian Journal of Economics, Canadian Economics Association, vol. 39(3), pages 790-808, August.
    8. Gawel, Erik & Bernsen, Kristina, 2011. "What is wrong with virtual water trading?," UFZ Discussion Papers 1/2011, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).

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