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Environmental Protection by One or Both Trading Partners in a Heckscher-Ohlin-Samuelson Model

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Author Info
Robert Kohn ()
Abstract

In this Heckscher-Ohlin-Samuelson model, production of a pollutive good damages production of another good within the same country. Unilateral and bilateral shifts from laissez faire to Pigouvian policy are numerically simulated for cases of low emissions and a high volume of trade, high emissions and a high volume of trade, and finally, high emissions and a low volume of trade. A country can be worse off when it becomes Pigouvian and it can be worse off when its trading partner becomes Pigouvian. Nevertheless, a simple game theory version of the model suggests a “race to the topâ€, in which all countries become Pigouvian. Copyright Kluwer Academic Publishers 1998

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File URL: http://hdl.handle.net/10.1023/A:1008313414694
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Publisher Info
Article provided by Springer in its journal Open Economies Review.

Volume (Year): 9 (1998)
Issue (Month): 4 (October)
Pages: 327-342
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Handle: RePEc:kap:openec:v:9:y:1998:i:4:p:327-342

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Related research
Keywords: environmental protection; international trade; Pigouvian tax; pollution damage;

References listed on IDEAS
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  1. Chen, Zhiqi, 1997. "Negotiating an Agreement on Global Warming: A Theoretical Analysis," Journal of Environmental Economics and Management, Elsevier, vol. 32(2), pages 170-188, February. [Downloadable!] (restricted)
  2. Baumol, William J, 1972. "On Taxation and the Control of Externalities," American Economic Review, American Economic Association, vol. 62(3), pages 307-22, June. [Downloadable!] (restricted)
  3. Tobey, James A, 1990. "The Effects of Domestic Environmental Policies on Patterns of World Trade: An Empirical Test," Kyklos, Blackwell Publishing, vol. 43(2), pages 191-209.
  4. Chichilnisky, Graciela, 1994. "North-South Trade and the Global Environment," American Economic Review, American Economic Association, vol. 84(4), pages 851-74, September. [Downloadable!] (restricted)
  5. Copeland, Brian R & Taylor, M Scott, 1994. "North-South Trade and the Environment," The Quarterly Journal of Economics, MIT Press, vol. 109(3), pages 755-87, August. [Downloadable!] (restricted)
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  6. Robert E. Kohn, 1991. "Global Pollution: A Heckscher-Ohlin-Samuelson Model of Pigouvian Taxation," Eastern Economic Journal, Eastern Economic Association, vol. 17(3), pages 337-343, Jul-Sep. [Downloadable!]
  7. Krutilla, Kerry, 1991. "Environmental regulation in an open economy," Journal of Environmental Economics and Management, Elsevier, vol. 20(2), pages 127-142, March. [Downloadable!] (restricted)
  8. James, Estelle, 1974. "Optimal pollution control and trade in collective goods," Journal of Public Economics, Elsevier, vol. 3(3), pages 203-216, August. [Downloadable!] (restricted)
  9. Siebert, Horst, 1977. "Environmental Quality and the Gains from Trade," Kyklos, Blackwell Publishing, vol. 30(4), pages 657-73.
  10. Chambers, Paul E. & Jensen, Richard A., 2002. "Transboundary Air Pollution, Environmental Aid, and Political Uncertainty," Journal of Environmental Economics and Management, Elsevier, vol. 43(1), pages 93-112, January. [Downloadable!] (restricted)
  11. Leger, Lawrence A, 1995. "Environmental Degradation as an Incentive for Trade," Review of International Economics, Blackwell Publishing, vol. 3(3), pages 307-18, October.
  12. Conrad Klaus, 1993. "Taxes and Subsidies for Pollution-Intensive Industries as Trade Policy," Journal of Environmental Economics and Management, Elsevier, vol. 25(2), pages 121-135, September. [Downloadable!] (restricted)
  13. Batabyal, Amitrajeet A., 1994. "An open economy model of the effects of unilateral environmental policy by a large developing country," Ecological Economics, Elsevier, vol. 10(3), pages 221-232, August. [Downloadable!] (restricted)
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