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The trade and environment nexus in Mexican agriculture. A general equilibrium analysis

Author

Listed:
  • Beghin, John C.
  • Dessus, Sebastien
  • Roland-Holst, David
  • Mensbrugghe, Dominique van der

Abstract

This paper analyzes linkages between growth, trade and the environment in Mexican agriculture with an empirical economy-wide model. The investigation considers trade liberalization, environmental policy reform, and their coordination. The analysis decomposes the change in pollution emission induced by changes in the sectoral composition of production, effects of technology on emission intensity, and aggregate scale effects. Outward orientation alone induces a contraction of aggregate agricultural output, but promotes growth and pollution in some agricultural sectors. Overall, free trade does not induce wholesale specialization in dirty agricultural activities. Environmental taxes on pollution emitted in agricultural sectors have a moderate negative impact on agricultural output, except for the tax on water-borne toxic chemicals. More liberal trade combined with targeted effluent taxes can achieve significant environmental mitigation and efficiency gains, but with the implication of a contraction of most agricultural sectors.

Suggested Citation

  • Beghin, John C. & Dessus, Sebastien & Roland-Holst, David & Mensbrugghe, Dominique van der, 1997. "The trade and environment nexus in Mexican agriculture. A general equilibrium analysis," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 17(2-3), December.
  • Handle: RePEc:ags:iaaeaj:174307
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    References listed on IDEAS

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    1. Beghin, John C. & Roland-Holst, David & Van der Mensbrugghe, Dominique, 1994. "Trade and Environment Nexus. Global Dimensions, The," Staff General Research Papers Archive 1589, Iowa State University, Department of Economics.
    2. Thomas Grennes & Barry Krissoff, 1993. "Agricultural Trade in a North American Free Trade Agreement," The World Economy, Wiley Blackwell, vol. 16(4), pages 483-502, July.
    3. Garcia-Barrio, Raul & Garcia-Barrios, Luis, 1990. "Environmental and technological degradation in peasant agriculture: A consequence of development in Mexico," World Development, Elsevier, vol. 18(11), pages 1569-1585, November.
    4. John Beghin & David Roland-Holts & Dominique van der Mensbrugghe, 1995. "Trade Liberalization and the Environment in the Pacific Basin: Coordinated Approaches to Mexican Trade and Environment Policy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(3), pages 778-785.
    5. Sébastien Dessus & David Roland-Holst & Dominique van der Mensbrugghe, 1994. "Input-Based Pollution Estimates for Environmental Assessment in Developing Countries," OECD Development Centre Working Papers 101, OECD Publishing.
    6. J. Andrès Espinosa & V. Kerry Smith, 1995. "Measuring the Environmental Consequences of Trade Policy: A Nonmarket CGE Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(3), pages 772-777.
    7. Brian R. Copeland & M. Scott Taylor, 1994. "North-South Trade and the Environment," The Quarterly Journal of Economics, Oxford University Press, vol. 109(3), pages 755-787.
    8. Heath, John Richard, 1992. "Evaluating the impact of Mexico's land reform on agricultural productivity," World Development, Elsevier, vol. 20(5), pages 695-711, May.
    9. John Beghin & David Roland-Holst & Dominique van der Mensbrugghe, 1997. "Trade and Pollution Linkages: Piecemeal Reform and Optimal Intervention," Canadian Journal of Economics, Canadian Economics Association, vol. 30(2), pages 442-455, May.
    10. 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.
    11. Levy, Santiago & van Wijnbergen, Sweder, 1995. "Transition Problems in Economic Reform: Agriculture in the North American Free Trade Agreement," American Economic Review, American Economic Association, vol. 85(4), pages 738-754, September.
    12. Harrison, Glenn W., 1993. "Environmentally sensitive industries and an emerging Mexico," The North American Journal of Economics and Finance, Elsevier, vol. 4(1), pages 109-126.
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    Cited by:

    1. ADKINS Liwayway G. & GARBACCIO Richard F., "undated". "Simulating the Effects of the FTAA on Global Carbon Emissions: A General Equilibrium Analysis," EcoMod2003 330700000, EcoMod.
    2. Toma, Luiza & Mathijs, Erik & Revoredo-Giha, Cesar, 2006. "Linkages between Agriculture, Trade and the Environment in the Context of the European Union Accession," Working Papers 45991, Scottish Agricultural College, Land Economy Research Group.
    3. Ervin, David E. & Fox, Glenn, 1998. "Environmental Policy Considerations In The Grain-Livestock Subsectors In Canada, Mexico And The United States," Economic Harmonization in the Canadian\U.S.\Mexican Grain-Livestock Subsector; Proceedings of the 4th Agricultural and Food Policy Systems... 1998 16754, Farm Foundation, Agricultural and Food Policy Systems Information Workshops.
    4. Peter Walkenhorst, 2004. "Domestic And International Environmental Impacts Of Agricultural Trade Liberalisation," International Trade 0401010, University Library of Munich, Germany.
    5. Peterson, Jeffrey M. & Boisvert, Richard N. & de Gorter, Harry, 1999. "Multifunctionality and Optimal Environmental Policies for Agriculture in an Open Economy," Working Papers 127701, Cornell University, Department of Applied Economics and Management.
    6. Colyer, Dale, 2002. "Environmental Impacts Of Agricultural Trade Under Nafta," Conference Papers 19104, West Virginia University, Department of Agricultural Resource Economics.
    7. Anna Strutt & Kym Anderson, 2000. "Will Trade Liberalization Harm the Environment? The Case of Indonesia to 2020," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 17(3), pages 203-232, November.
    8. Michael Ferrantino & Linda Linkins, 1999. "The effect of global trade liberalization on toxic emissions in industry," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 135(1), pages 128-155, March.
    9. Jie He & David Roland-Holst, 2010. "Economic Growth, Energy demand and Atmospheric Pollution: Challenges and Opportunities for China in the future 30 years," Cahiers de recherche 10-11, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
    10. Al-Amin, Abul Quasem & Abdul Hamid, Jaafar & Chamhuri, Siwar, 2008. "Macroeconomic effects of carbon dioxide emission reduction: a computable general equilibrium analysis for Malaysia," MPRA Paper 8667, University Library of Munich, Germany.
    11. Salvator Nkunzimana & H. Alan Love & C. Richard Shumway, 2003. "Mexican agricultural trade under the GATT," Applied Economics, Taylor & Francis Journals, vol. 35(4), pages 449-459.
    12. He, Jie, 2005. "Estimating the economic cost of China's new desulfur policy during her gradual accession to WTO: The case of industrial SO2 emission," China Economic Review, Elsevier, vol. 16(4), pages 364-402.
    13. Dasgupta, Susmita & Meisner, Craig & Wheeler, David & Jin, Yanhong, 2002. "Agricultural Trade, Development and Toxic Risk," World Development, Elsevier, vol. 30(8), pages 1401-1412, August.

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