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Economic integration and environmental policy coordination

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  • Straume, Odd Rune

    ()
    (Institute for Research in Economics and Business Administration (SNF) and University of Bergen, Department of Economics)

Abstract

We analyse the effect of international economic integration on environmental policy incentives when product markets are characterised by imperfect competition and national policy makers act strategically. If traditional trade policy instruments are not available, environmental policies will typically be determined by the interaction of conflicting policy incentives. We find that economic integration — interpreted as a reduction of non-tariff trade costs — will reduce policy distortions in the non-cooperative policy game if the marginal social cost of pollution is increasing at a sufficiently low rate. In this case, it follows that increased integration reduces the need for transnational policy coordination, from an environmentalist perspective.

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Bibliographic Info

Paper provided by University of Bergen, Department of Economics in its series Working Papers in Economics with number 13/03.

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Length: 21 pages
Date of creation: 08 Nov 2003
Date of revision:
Handle: RePEc:hhs:bergec:2003_013

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Postal: Institutt for økonomi, Universitetet i Bergen, Postboks 7802, 5020 Bergen, Norway
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Web page: http://www.uib.no/econ/en
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Keywords: Economic integration; Strategic environmental policy; Policy coordination.;

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