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Trade Restrictiveness and Pollution

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  • NANCY H. CHAU
  • ROLF FÄRE
  • SHAWNA GROSSKOPF

Abstract

This paper proposes a trade restrictiveness indicator that explicitly incorporates environmental externalities. The index employs directional distance functions and use indicators (i.e. differences rather than ratios) modified to account for and evaluate efficiency changes in the face of simultaneous and multi-dimensional trade and environmental policy reforms. The index is made up of two components, one for production and one for consumption. Our overall trade restrictiveness indicator is accordingly the difference of the two. The properties of the indicator are developed and discussed together with its estimation.
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Suggested Citation

  • Nancy H. Chau & Rolf Färe & Shawna Grosskopf, 2013. "Trade Restrictiveness and Pollution," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 15(1), pages 25-52, February.
  • Handle: RePEc:bla:jpbect:v:15:y:2013:i:1:p:25-52
    DOI: jpet.12008
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    1. James E. Anderson & J. Peter Neary, 1996. "A New Approach to Evaluating Trade Policy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 63(1), pages 107-125.
    2. Nancy H. Chau & Rolf F”re & Shawna Grosskopf, 2003. "Trade restrictiveness and efficiency," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(3), pages 1079-1095, August.
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    8. W. Erwin Diewert & Alan D. Woodland, 2004. "The Gains from Trade and Policy Reform Revisited," Review of International Economics, Wiley Blackwell, vol. 12(4), pages 591-608, September.
    9. Werner Antweiler & Brian R. Copeland & M. Scott Taylor, 2001. "Is Free Trade Good for the Environment?," American Economic Review, American Economic Association, vol. 91(4), pages 877-908, September.
    10. Brian R. Copeland & M. Scott Taylor, 1994. "North-South Trade and the Environment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(3), pages 755-787.
    11. Fare, Rolf & Grosskopf, Shawna & Noh, Dong-Woon & Weber, William, 2005. "Characteristics of a polluting technology: theory and practice," Journal of Econometrics, Elsevier, vol. 126(2), pages 469-492, June.
    12. 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.
    13. Fukushima, Takashi, 1979. "Tariff Structure, Nontraded Goods and Theory of Piecemeal Policy Recommendations," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 20(2), pages 427-435, June.
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    1. repec:hal:pseose:hal-00961727 is not listed on IDEAS
    2. John Christopher Beghin & Anne-Célia Disdier & Stéphan Marette, 2017. "Trade restrictiveness indices in the presence of externalities: An application to non-tariff measures," World Scientific Book Chapters, in: John Christopher Beghin (ed.), Nontariff Measures and International Trade, chapter 5, pages 81-104, World Scientific Publishing Co. Pte. Ltd..
    3. repec:hal:gmonwp:hal-00961727 is not listed on IDEAS
    4. Nelson, Douglas & Puccio, Laura, 2021. "Nihil novi sub sole: The Need for Rethinking WTO and Green Subsidies in Light of United States – Renewable Energy," World Trade Review, Cambridge University Press, vol. 20(4), pages 491-508, October.

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