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Does Trade Always Harm the Global Environment? A Case for Positive Interaction

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  • Alpay, Savas

Abstract

We demonstrate that there are links between international trade and environmental control, heretofore unappreciated, which might substantially alter the efficacy of various governmental policies to control pollution. One concern about national environmental policies is that, whereas the benefits of certain types of abatement might be international or even worldwide, the costs will be borne strictly by the consumers and firms of the country which institutes the policy. As a result, for those types of pollution which are global (such as greenhouse gases) there will be too little pollution abatement. Our first result is that this pessimistic conclusion may be unwarranted. In a 2 x 2 Ricardian model, we also show cases where the non-cooperative contribution of countries to global environmental protection, contrary to the conventional results, exceeds that of the cooperative one due to associated changes in the terms of trade. Thus, international trade is not always a threat to global environment. Copyright 2000 by Oxford University Press.

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  • Alpay, Savas, 2000. "Does Trade Always Harm the Global Environment? A Case for Positive Interaction," Oxford Economic Papers, Oxford University Press, vol. 52(2), pages 272-288, April.
  • Handle: RePEc:oup:oxecpp:v:52:y:2000:i:2:p:272-88
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    Cited by:

    1. Merlevede, Bruno & Verbeke, Tom & De Clercq, Marc, 2006. "The EKC for SO2: Does firm size matter?," Ecological Economics, Elsevier, vol. 59(4), pages 451-461, October.
    2. Gulati, Sumeet, 2003. "The Effect Of Free Trade On Pollution Policy And Welfare," Working Papers 15849, University of British Columbia, Food and Resource Economics.
    3. Dirk T.G. Rübbelke & Vivekananda Mukherjee & Tilak Sanyal, 2008. "Technology Transfer in the Non-traded Sector as a Means to Combat Global Warming," Working Papers 2008.78, Fondazione Eni Enrico Mattei.
    4. Maryam Asghari, 2014. "Economic Competitiveness and Environmental Policy: An Application of the Heckscher-Ohlin-Vanek (HOV) Model," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 18(3), pages 27-44, Autumn.
    5. Claudia Kemfert & Wietze Lise & Richard Tol, 2004. "Games of Climate Change with International Trade," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 28(2), pages 209-232, June.
    6. Pelkmans, Jacques, 2003. "European Integration, Deepening and Widening Economic Analysis," Conference papers 331166, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    7. Anriquez, Gustavo, 2002. "Trade And The Environment: An Economic Literature Survey," Working Papers 28598, University of Maryland, Department of Agricultural and Resource Economics.
    8. Nicolas Peridy, 2006. "Pollution effects of free trade areas: Simulations from a general equilibrium model," International Economic Journal, Taylor & Francis Journals, vol. 20(1), pages 37-62.
    9. Fischer, Carolyn & Fox, Alan K., 2011. "On the Scope for Output-Based Rebating in Climate Policy," Conference papers 332056, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    10. Levy, Amnon & Livermore, Jonathon, 2009. "Emission Abatement with Per Capita and Trade Considerations," Economics Working Papers wp09-04, School of Economics, University of Wollongong, NSW, Australia.
    11. Bishop, Phillip & Walton, Mark & Sundakov, Alex, 2002. "The Economic Effect of Greenhouse Policies in New Zealand," Conference papers 331065, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

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