Ecological dumping under foreign investment quotas
AbstractIn this paper, we examine the discrimination of emission taxes between the export and nontradable sectors in a small country. A few articles indicate that there should be no differentiation of environmental policies between sectors in a small country if the government uses indirect instruments as emission taxes. However, we show that the discrimination of emission taxes may occur in a small country that imposes foreign investment quotas. In particular, the possibility that ecological dumping occurs is higher if export goods are more labor intensive than import goods, as in developing countries. Moreover, in the case where imported goods are most capital intensive, both emission tax rates may be lower than marginal environmental damage, and ecological dumping may occur. It is also shown that easing foreign capital quotas may deteriorate the small countryfs welfare.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP) in its series Discussion Papers in Economics and Business with number 08-31.
Length: 25 pages
Date of creation: Sep 2008
Date of revision:
ecological dumping; emission tax; nontraded goods; international trade; capital movement;
Find related papers by JEL classification:
- F18 - International Economics - - Trade - - - Trade and Environment
- F20 - International Economics - - International Factor Movements and International Business - - - General
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kerstin Schneider & Dietmar Wellisch*, 1997. "Eco-Dumping, Capital Mobility, and International Trade," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 10(4), pages 387-404, December.
- Chi-Chur Chao & Eden Yu, 1998. "Optimal pollution and foreign-investment taxes in a small open economy," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 7(1), pages 71-85.
- Ulph, Alistair & Valentini, Laura, 2001. " Is Environmental Dumping Greater When Plants Are Footloose?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 103(4), pages 673-88, December.
- Richter, Wolfram F. & Schneider, Kerstin, 2003. "Energy taxation: Reasons for discriminating in favor of the production sector," European Economic Review, Elsevier, vol. 47(3), pages 461-476, June.
- Walz, Uwe & Wellisch, Dietmar, 1997. "Is free trade in the interest of exporting countries when there is ecological dumping?," Journal of Public Economics, Elsevier, vol. 66(2), pages 275-291, November.
- Suzuki, Katsuhiko, 1983. "A synthesis of the heckscher-ohlin and the neoclassical models of international trade : A Comment," Journal of International Economics, Elsevier, vol. 14(1-2), pages 141-144, February.
- Greaker, Mads, 2003. "Strategic environmental policy; eco-dumping or a green strategy?," Journal of Environmental Economics and Management, Elsevier, vol. 45(3), pages 692-707, May.
- Cees A. Withagen & Raymond J.G.M. Florax & Abay Mulatu, 2007.
"Optimal environmental policy differentials in open economies under emissions constraints,"
The School of Economics Discussion Paper Series
0701, Economics, The University of Manchester.
- C. Withagen & R. Florax & A. Mulatu, 2007. "Optimal Environmental Policy Differentials in Open Economies under Emissions Constraints," Journal of Economics, Springer, vol. 91(2), pages 129-149, June.
- Batra, Raveendra N. & Casas, Francisco R., 1976. "A synthesis of the Heckscher-Ohlin and the neoclassical models of international trade," Journal of International Economics, Elsevier, vol. 6(1), pages 21-38, February.
- Beladi, Hamid & Chao, Chi-Chur & Frasca, Ralph, 1999. "Foreign investment and environmental regulations in LDCs," Resource and Energy Economics, Elsevier, vol. 21(2), pages 191-199, May.
- Rauscher, Michael, 1994. "On Ecological Dumping," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 822-40, Supplemen.
- Copeland Brian R., 1994. "International Trade and the Environment: Policy Reform in a Polluted Small Open Economy," Journal of Environmental Economics and Management, Elsevier, vol. 26(1), pages 44-65, January.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Atsuko SUZUKI).
If references are entirely missing, you can add them using this form.