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Efficiency, equity, and environmental implications of trade liberalization: A computable general equilibrium analysis

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Author Info

  • Donna Lee
  • Jian Zhang

Abstract

This paper evaluates the effect of trade liberalization on global efficiency, equity, and the environment using global welfare, welfare redistribution, and carbon emission as indicators. A static, computable general equilibrium trade model with explicit representation of agricultural production and energy use is used to simulate a series of new scenarios in which 1997 baseline import tax and export subsidy trade barrier equivalents are scaled back. Findings indicate that with trade liberalization agricultural output declines, energy use increases, and carbon emissions rise. Global welfare rises revealing an overall increase in efficiency; however, gains to poorer nations come at the expense of richer nations. An increase in the use of polluting inputs such as coal in developing countries suggests poorer nations will risk environmental degradation with the lowering of trade barriers.

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File URL: http://www.tandfonline.com/doi/abs/10.1080/09638190902986504
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal The Journal of International Trade & Economic Development.

Volume (Year): 18 (2009)
Issue (Month): 3 ()
Pages: 347-371

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Handle: RePEc:taf:jitecd:v:18:y:2009:i:3:p:347-371

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Related research

Keywords: agriculture; energy; welfare; climate change; modeling;

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