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Renewable Resources, Pollution and Trade in a Small Open Economy

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  • Rus, Horatiu A.

Abstract

Industrial pollution can have damaging effects on resource-based productive sectors. International trade creates opportunities for overexploitation of the open-access renewable resources but also for separating the sectors spatially. The paper shows that, depending on the relative damage inflicted by the two industries on the environment, it is possible that the production externality will persist and that specialization in the dirty good may not be the obvious choice from a welfare perspective. Also, the resource exporter does not necessarily have to lose from trade even when specializing incompletely, due to the partially offsetting external effects.

Suggested Citation

  • Rus, Horatiu A., 2006. "Renewable Resources, Pollution and Trade in a Small Open Economy," Climate Change Modelling and Policy Working Papers 12020, Fondazione Eni Enrico Mattei (FEEM).
    • Handle: RePEc:ags:feemcc:12020
    DOI: 10.22004/ag.econ.12020
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    References listed on IDEAS

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    Cited by:

    1. Soham Baksi & Michael Benarroch, 2015. "Production Externalities, Environmental Taxes, and the Gains from Trade," Departmental Working Papers 2015-05, The University of Winnipeg, Department of Economics.

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    More about this item

    Keywords

    Environmental Economics and Policy; International Relations/Trade;

    JEL classification:

    • Q27 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Issues in International Trade
    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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