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North–south trade in reusable goods: Green design meets illegal shipments of waste

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  • Bernard, Sophie

Abstract

In a stylized model of international trade, firms in the North indirectly export second-hand products to a representative firm in the South to be reused as intermediate goods, with potential trade gains. The level of reusability of waste products – or green design – is a crucial choice variable in the North. This is because, in the presence of imperfect international monitoring, non-reusable waste can be illegally mixed with reusable waste. I explore the driving forces for illegal waste movement, with a particular focus on local waste regulations such as the EU׳s Directive on Waste Electrical and Electronic Equipment. Under mild conditions, it is shown that increasingly stringent regulations in the North can induce Northern firms to reduce product reusability. Consequently, the flow of non-reusable waste to the South increases, magnifying the pollution haven effect.

Suggested Citation

  • Bernard, Sophie, 2015. "North–south trade in reusable goods: Green design meets illegal shipments of waste," Journal of Environmental Economics and Management, Elsevier, vol. 69(C), pages 22-35.
  • Handle: RePEc:eee:jeeman:v:69:y:2015:i:c:p:22-35
    DOI: 10.1016/j.jeem.2014.10.004
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    References listed on IDEAS

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    1. Copeland, Brian R., 1991. "International trade in waste products in the presence of illegal disposal," Journal of Environmental Economics and Management, Elsevier, vol. 20(2), pages 143-162, March.
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    9. Garth Frazer, 2008. "Used-Clothing Donations and Apparel Production in Africa," Economic Journal, Royal Economic Society, vol. 118(532), pages 1764-1784, October.
    10. Hiroaki Ino, 2007. "Extended producer responsibility in oligopoly," Economics Bulletin, AccessEcon, vol. 17(6), pages 1-9.
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    Cited by:

    1. Núñez-Rocha, Thaís & Martínez-Zarzoso, Inmaculada, 2018. "Are international environmental policies effective? The case of the Rotterdam and the Stockholm Conventions," Center for European, Governance and Economic Development Research Discussion Papers 333, University of Goettingen, Department of Economics.
    2. repec:spr:ieaple:v:17:y:2017:i:6:d:10.1007_s10784-017-9350-4 is not listed on IDEAS
    3. repec:ebl:ecbull:eb-17-00629 is not listed on IDEAS
    4. Prudence Dato, 2015. "Economic analysis of e-waste market under imperfect information," Working Papers halshs-01172148, HAL.

    More about this item

    Keywords

    Waste; Second-hand products; Environmental regulations; Extended producer responsibility; Trade; Green design; Illegal market; WEEE;

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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