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Trade, Politics,and the Environment: Tailpipe vs. Smokestack

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  • McAusland, Carol

Abstract

Economists interested in the interaction between trade, politics and the environ-ment have restricted their attention almost exclusively to the problem of production related—“smokestackâ€â€”pollution. We instead consider consumption related—“tailpipeâ€â€”pollution and show that this can reverse a number of core results. For example, we show that the impact of regulation on trade patterns depends on the type of pollution being regulated: while strict smokestack regula-tion dampens exports of pollution intensive goods, tailpipe regulation may promote these exports. Similarly, we show that pollution type may fundamentally alter the impact of openness on political opposition to environmental regulation: while openness may make dirty industry oppose smokestack regulation more vociferously, it can make industry a less ardent enemy of tailpipe regulation.

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Bibliographic Info

Paper provided by Department of Economics, UC Santa Barbara in its series University of California at Santa Barbara, Economics Working Paper Series with number qt0406x646.

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Date of creation: 01 Dec 2003
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Handle: RePEc:cdl:ucsbec:qt0406x646

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Keywords: Trade; Politics; Environment;

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References

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  1. Fredriksson, Per G., 1997. "The Political Economy of Pollution Taxes in a Small Open Economy," Journal of Environmental Economics and Management, Elsevier, Elsevier, vol. 33(1), pages 44-58, May.
  2. Lopez Ramon, 1994. "The Environment as a Factor of Production: The Effects of Economic Growth and Trade Liberalization," Journal of Environmental Economics and Management, Elsevier, Elsevier, vol. 27(2), pages 163-184, September.
  3. Buchanan, James M & Tullock, Gordon, 1975. "Polluters' Profits and Political Response: Direct Controls Versus Taxes," American Economic Review, American Economic Association, American Economic Association, vol. 65(1), pages 139-47, March.
  4. Deacon, Robert, 1999. "The Political Economy of Environment-Development Relationships: A Preliminary Framework," University of California at Santa Barbara, Economics Working Paper Series, Department of Economics, UC Santa Barbara qt8h33b5c0, Department of Economics, UC Santa Barbara.
  5. Robert S. Pindyck, 1979. "The Structure of World Energy Demand," MIT Press Books, The MIT Press, The MIT Press, edition 1, volume 1, number 0262661772, December.
  6. Krutilla, Kerry, 1991. "Environmental regulation in an open economy," Journal of Environmental Economics and Management, Elsevier, Elsevier, vol. 20(2), pages 127-142, March.
  7. Daniel J. Graham & Stephen Glaister, 2002. "The Demand for Automobile Fuel: A Survey of Elasticities," Journal of Transport Economics and Policy, London School of Economics and University of Bath, London School of Economics and University of Bath, vol. 36(1), pages 1-25, January.
  8. McAusland, Carol, 2005. "Harmonizing tailpipe policy in symmetric countries: Improve the environment, improve welfare?," Journal of Environmental Economics and Management, Elsevier, Elsevier, vol. 50(2), pages 229-251, September.
  9. Bommer, Rolf & Schulze, Gunther G., 1999. "Environmental improvement with trade liberalization," European Journal of Political Economy, Elsevier, Elsevier, vol. 15(4), pages 639-661, November.
  10. Saul H. Hymans, 1970. "Consumer Durable Spending: Explanation and Prediction," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, Economic Studies Program, The Brookings Institution, vol. 1(2), pages 173-206.
  11. Bengt Kristrom & Pere Riera, 1996. "Is the income elasticity of environmental improvements less than one?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 7(1), pages 45-55, January.
  12. McAusland, Carol, 2003. "Voting for pollution policy: the importance of income inequality and openness to trade," Journal of International Economics, Elsevier, Elsevier, vol. 61(2), pages 425-451, December.
  13. Deacon, Robert & Norman, Catherine S, 2004. "Is the environmental Kuznets curve an empirical regularity?," University of California at Santa Barbara, Economics Working Paper Series, Department of Economics, UC Santa Barbara qt2m44f7kr, Department of Economics, UC Santa Barbara.
  14. Damania, Richard & Fredriksson, Per G. & List, John A., 2003. "Trade liberalization, corruption, and environmental policy formation: theory and evidence," Journal of Environmental Economics and Management, Elsevier, Elsevier, vol. 46(3), pages 490-512, November.
  15. Mody, Ashoka & Roy, Subhendu & Wheeler, David & Dasgupta, Susmita, 1995. "Environmental regulation and development : a cross-country empirical analysis," Policy Research Working Paper Series, The World Bank 1448, The World Bank.
  16. repec:fth:calaec:11-99 is not listed on IDEAS
  17. Swee Chua, 2003. "Does tighter environmental policy lead to a comparative advantage in less polluting goods?," Oxford Economic Papers, Oxford University Press, Oxford University Press, vol. 55(1), pages 25-35, January.
  18. Schleich, Joachim, 1999. "Environmental quality with endogenous domestic and trade policies1," European Journal of Political Economy, Elsevier, Elsevier, vol. 15(1), pages 53-71, March.
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Citations

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Cited by:
  1. Shahbaz, Muhammad & Ozturk, Ilhan & Afza, Talat & Ali, Amjad, 2013. "Revisiting the Environmental Kuznets Curve in a Global Economy," MPRA Paper 46610, University Library of Munich, Germany, revised 23 Apr 2013.
  2. Gori, Giuseppe Francesco & Lambertini, Luca, 2013. "Trade liberalisation between asymmetric countries with environmentally concerned consumers," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 43(4), pages 549-560.
  3. Lucas W. Davis & Matthew E. Kahn, 2008. "International Trade in Used Durable Goods: The Environmental Consequences of NAFTA," NBER Working Papers 14565, National Bureau of Economic Research, Inc.
  4. Soham Baksi, 2011. "Regional versus Multilateral Trade Liberalization, Environmental Taxation and Welfare," Departmental Working Papers, The University of Winnipeg, Department of Economics 2011-03, The University of Winnipeg, Department of Economics.
  5. Islam, Asif M. & López, Ramón E., 2013. "Government Spending and Air Pollution in the US," Working Papers, University of Maryland, Department of Agricultural and Resource Economics 144406, University of Maryland, Department of Agricultural and Resource Economics.
  6. Frankel, Jeffrey A., 2009. "Environmental Effects of International Trade," Scholarly Articles, Harvard Kennedy School of Government 4481652, Harvard Kennedy School of Government.
  7. Copeland, Brian R., 2012. "International trade and green growth," Policy Research Working Paper Series, The World Bank 6235, The World Bank.
  8. M. Scott Taylor, 2007. "Buffalo Hunt: International Trade and the Virtual Extinction of the North American Bison," NBER Working Papers 12969, National Bureau of Economic Research, Inc.
  9. Gregmar Galinato, . "The Challenge of Addressing Consumption Pollutants with Fiscal Policy," Working Papers, School of Economic Sciences, Washington State University 2014-1, School of Economic Sciences, Washington State University.
  10. Kellenberg, Derek, 2012. "Trading wastes," Journal of Environmental Economics and Management, Elsevier, Elsevier, vol. 64(1), pages 68-87.

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