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Trade, technical progress and the environment: the role of a unilateral green tax on consumption

Author

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  • Daniela Marconi

    (Bank of Italy, Economics and International Relations)

Abstract

The paper proposes a two-country general equilibrium model of endogenous growth and trade between two regions, North and South, with different environmental standards. Pollution is a by-product of consumption and in order to abate it the northern region unilaterally imposes a green tax on consumption. As the tax affects domestic demand of consumer goods according to their pollution intensities, regardless of where those goods are produced, the model shows that such a unilateral environmental policy can increase the speed of technological change and pollution abatement in both regions.

Suggested Citation

  • Daniela Marconi, 2010. "Trade, technical progress and the environment: the role of a unilateral green tax on consumption," Temi di discussione (Economic working papers) 744, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:wptemi:td_744_10
    as

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    File URL: http://www.bancaditalia.it/pubblicazioni/temi-discussione/2010/2010-0744/en_tema_744.pdf
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    References listed on IDEAS

    as
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    5. Daniela Marconi, 2007. "Endogenous growth and trade liberalization between asymmetric countries," Temi di discussione (Economic working papers) 630, Bank of Italy, Economic Research and International Relations Area.
    6. Peretto, Pietro F, 1998. "Technological Change and Population Growth," Journal of Economic Growth, Springer, vol. 3(4), pages 283-311, December.
    7. Pietro Peretto, 2008. "Effluent taxes, market structure, and the rate and direction of endogenous technological change," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 39(2), pages 113-138, February.
    8. Brian R. Copeland & M. Scott Taylor, 1995. "Trade and the Environment: A Partial Synthesis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(3), pages 765-771.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Carlo Orecchia & Maria Elisabetta Tessitore, 2011. "Economic Growth and the Environment with Clean and Dirty Consumption," Working Papers 2011.57, Fondazione Eni Enrico Mattei.
    2. Leonardo Becchetti & Vittorio Pelligra & Francesco Salustri, 2018. "The impact of redistribution mechanisms in the vote with the wallet game: experimental results," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 51(4), pages 595-619, December.
    3. Becchetti, Leonardo & Salustri, Francesco, 2016. "The political economy of the vote with the wallet," AICCON Working Papers 146-2016, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.
    4. Hany M. Elshamy & Khaled I. Sayed Ahmed, 2017. "Green Fiscal Reforms, Environment and Sustainable Development," International Journal of Applied Economics, Finance and Accounting, Online Academic Press, vol. 1(1), pages 48-52.

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    More about this item

    Keywords

    Trade; environment; consumption externality; technological change;
    All these keywords.

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F18 - International Economics - - Trade - - - Trade and Environment

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