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Trade and environment: policy linkages

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  • COPELAND, BRIAN R.

Abstract

This paper develops a simple model to investigate linkages between trade and environmental policy. In the case of purely local pollution, trade liberalization without constraints on environmental policy induces a non-cooperative game between countries in pollution policy. Without any agreement on environmental policy, trade negotiations are unlikely to lead to a point on the Pareto frontier. When pollution is global, countries may be expected to disagree on linkages between trade agreements and environmental agreements. Countries importing pollution-intensive goods have an incentive to try to link trade agreements with environmental agreements, while countries exporting pollution-intensive goods have an incentive to try to obtain a binding commitment to free trade prior to negotiations over global pollution.

Suggested Citation

  • Copeland, Brian R., 2000. "Trade and environment: policy linkages," Environment and Development Economics, Cambridge University Press, vol. 5(4), pages 405-432, October.
    • Handle: RePEc:cup:endeec:v:5:y:2000:i:04:p:405-432_00
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    Cited by:

    1. Joseph S Shapiro, 2021. "The Environmental Bias of Trade Policy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(2), pages 831-886.
    2. Alain-Désiré Nimubona, 2010. "Pollution Policy and Liberalization of Trade in Environmental Goods," Working Papers 1004, University of Waterloo, Department of Economics, revised May 2010.
    3. Nikos Tsakiris & Michael Michael & Panos Hatzipanayotou, 2014. "Asymmetric Tax Policy Responses in Large Economies With Cross-Border Pollution," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 58(4), pages 563-578, August.
    4. Bård Harstad, 2022. "Trade, Trees, and Contingent Trade Agreements," CESifo Working Paper Series 9596, CESifo.
    5. Perrings, Charles, 2014. "Environment and development economics 20 years on," Environment and Development Economics, Cambridge University Press, vol. 19(3), pages 333-366, June.
    6. Nicolas Peridy, 2006. "Pollution effects of free trade areas: Simulations from a general equilibrium model," International Economic Journal, Taylor & Francis Journals, vol. 20(1), pages 37-62.
    7. Bård Harstad, 2020. "Trade and Trees: How Trade Agreements Can Motivate Conservation Instead of Depletion," CESifo Working Paper Series 8569, CESifo.
    8. Ibitoye J. Oyebanji & Ewert P. J. Kleynhans, 2021. "Renewable energy, international trade, carbon dioxide emissions, and economic growth in Nigeria," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2021(2), pages 173-195.
    9. De Lucia, Caterina & Bartlett, Mark, 2014. "Implementing a biofuel economy in the EU: Lessons from the SUSTOIL project and future perspectives for next generation biofuels," Renewable and Sustainable Energy Reviews, Elsevier, vol. 29(C), pages 22-30.
    10. Lai, Yu-Bong & Hu, Chia-Hsien, 2008. "Trade agreements, domestic environmental regulation, and transboundary pollution," Resource and Energy Economics, Elsevier, vol. 30(2), pages 209-228, May.
    11. Alain-Désiré Nimubona, 2012. "Pollution Policy and Trade Liberalization of Environmental Goods," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 53(3), pages 323-346, November.
    12. Meeta K. Mehra, "undated". "North-South Capital Movement and Global Environment," Centre for International Trade and Development, Jawaharlal Nehru University, New Delhi Discussion Papers 09-12, Centre for International Trade and Development, Jawaharlal Nehru University, New Delhi, India.
    13. Mandal, Biswajit & Roy Bardhan, Arya, 2023. "Controlling Environmental Pollution, Sectoral Composition and Factor Prices: A H-O and SFM Hybrid Approach," MPRA Paper 116961, University Library of Munich, Germany.
    14. Klimenko, Mikhail M., 2009. "Policies and international trade agreements on technical compatibility for industries with network externalities," Journal of International Economics, Elsevier, vol. 77(2), pages 151-166, April.
    15. Nijkamp, P. & Verbruggen, H., 2002. "Global trends and climate change policies," Serie Research Memoranda 0004, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    16. Copeland, Brian R., 2012. "International trade and green growth," Policy Research Working Paper Series 6235, The World Bank.
    17. Yu-Bong Lai, 2007. "The political economy linkage between trade liberalization and domestic environmental regulations," Public Choice, Springer, vol. 133(1), pages 57-72, October.
    18. Muhammad, Shahbaz & Avik, Sinha & Muhammad Ibrahim, Shah, 2021. "Differential Impacts of US-China Trade War and Outbreak of COVID-19 on Chinese Air Quality," MPRA Paper 110040, University Library of Munich, Germany, revised 2021.
    19. Anriquez, Gustavo, 2002. "Trade And The Environment: An Economic Literature Survey," Working Papers 28598, University of Maryland, Department of Agricultural and Resource Economics.
    20. Xiao Chen & Alan Woodland, 2013. "International trade and climate change," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(3), pages 381-413, June.
    21. Qiang Wang & Xiaowei Wang & Rongrong Li & Xueting Jiang, 2024. "Reinvestigating the environmental Kuznets curve (EKC) of carbon emissions and ecological footprint in 147 countries: a matter of trade protectionism," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-17, December.
    22. Maamoun, Nada, 2021. "IEAs and compliance: Do treaty linkages play a role?," ILE Working Paper Series 43, University of Hamburg, Institute of Law and Economics.

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