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Trade and Pollution Linkages: Piecemeal Reform and Optimal Intervention

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Author Info
John Beghin
David Roland-Holst
Dominique van der Mensbrugghe ()

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Abstract

Linkages between international trade and the domestic environment are receiving intensified scrutiny by researchers and policy makers alike. This is especially the case in developing countries, where trade can be a significant agent of change and growth. While trade policies are increasingly oriented toward lower levels of intervention, interventionist policies are increasingly being implemented to correct for negative environmental externalities. In such a situation, the interactions between the two can be complex and challenging for policy makers.

This paper explores second-best policy issues affecting trade and environmental linkages. We derive optimum policy interventions and sufficient conditions for welfareimproving piecemeal trade and environmental policy reforms in a small economy. Pollution originates in both domestic consumption and production and is a domestic public bad. Production pollution can be abated by decreasing output and/or decreasing effluent rates per unit of ...


Les liens entre le commerce international et l'environnement local font l'objet d'un examen très attentif tant de la part des chercheurs que de la part des décideurs. Cela est particulièrement le cas dans les pays en développement où le commerce peut être un facteur significatif de changement qualitatif et matériel du niveau de vie. Si les politiques commerciales sont de plus en plus orientées vers la libéralisation, en revanche, les politiques d'intervention servent de plus en plus à corriger les externalités négatives sur l'environnement. Dans un tel contexte, les interactions se produisant entre ces deux types de politiques peuvent être d'une nature complexe et représenter un défi pour les décideurs.

Ce document étudie les aspects de ces politiques de second ordre qui ont une incidence sur les liens entre le commerce et l'environnement. Il déduit les politiques d'intervention optimales et les conditions suffisantes pour une amélioration du bien-être induites par des réformes ...

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Paper provided by OECD Development Centre in its series OECD Development Centre Working Papers with number 99.

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Date of creation: Oct 1994
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Handle: RePEc:oec:devaaa:99-en

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  1. Sébastien Dessus & David O'Connor, 2003. "Climate Policy without Tears CGE-Based Ancillary Benefits Estimates for Chile," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 25(3), pages 287-317, July. [Downloadable!] (restricted)
  2. Metcalfe, Mark R. & Beghin, John C., 1999. "Piecemeal Reform of Trade and Environmental Policy When Cosumption Also Pollutes," Staff General Research Papers 4047, Iowa State University, Department of Economics. [Downloadable!]
    Other versions:
  3. Panos Hatzipanayotou & Sajal Lahiri & Michael S. Michael, 2000. "Can Cross-Border Pollution Reduce Pollution?," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
    Other versions:
  4. John C. Beghin & Brad J. Bowland & Sebastien Dessus & David Roland-Holst & Dominique van der Mensbrugghe, 1999. "Trade Integration, Environmental Degradation, and Public Health in Chile: Assessing the Linkages," Food and Agricultural Policy Research Institute (FAPRI) Publications 99-wp211, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University. [Downloadable!]
    Other versions:
  5. Heinz Jansen, 2001. "Induced Institutional Change in the Trade and Environment Debate," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 18(2), pages 149-172, February. [Downloadable!] (restricted)
  6. Panos Hatzipanayotou & Sajal Lahiri & Michael S. Michael, 2002. "Reforms of Environmental Policies in the Presence of Cross-border Pollution and Two-stage Clean-up," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
    Other versions:
  7. M. Ozgur Kayalica & Olgay Kayalica, 2007. "Transboundary Pollution From Consumption In A Reciprocal Dumping Model," Global Economy Journal, International Trade and Finance Association, vol. 5(2), pages 7. [Downloadable!]
  8. Panos Hatzipanayotou & Sajal Lahiri & Michael S. Michael, 2005. "Globalization, Cross-Border Pollution and Welfare," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
  9. Kenneth A. Reinert, David W. Roland-Holst, 2001. "Industrial Pollution Linkages in North America: a Linear Analysis," Economic Systems Research, Taylor and Francis Journals, vol. 13(2), pages 197-208, June. [Downloadable!] (restricted)
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