Trade and Environment Linkages: Piecemeal Reform and Optimal Intervention
AbstractWe demonstrate how coordinated trade and environmental policy can achieve efficiency and pollution mitigation gains superior to those obtained without such coordination. We show how trade and environment linkages give rise to complex second-best policy issues and derive optimal interventions and sufficient conditions for welfare-improving piecemeal trade and environmental policy reforms in a small economy. Changing trade and environment distortions in proportion to their optimal levels increases welfare. We decompose the economic and environment effects of policies targeted at trade and pollution in both consumption and production. We also decompose production responses into output adjustments and changes in pollution intensities.
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Bibliographic InfoPaper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 1478.
Date of creation: 01 May 1997
Date of revision:
Publication status: Published in Canadian Journal of Economics, May 1997, vol. 30 no. 2, pp. 442-455
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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
Web page: http://www.econ.iastate.edu
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- Beghin, John C. & Disdier, Anne-Celia & Marette, Stephan, 2012.
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