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On the effects of emission standards as a non-tariff barrier to trade in the case of a foreign Bertrand duopoly: A note

  • Toshimitsu, Tsuyoshi

Employing a model of an environmentally differentiated product market, we analyze how an emission regulation as non-tariff barriers to trade affects imports, the environment, and welfare in the case of a foreign Bertrand duopoly. Related to this issue, we reconsider the result of Moraga-González and Padrón-Fumero [Moraga-González, J.L., Padrón-Fumero, N., 2002. Environmental policy in a green market. Environmental and Resource Economics 22, 419-447] that a strict emission standard on a dirtier product degrades the environment and reduces the net social surplus associated with the valuation of environmental damage, if the marginal social valuation of environmental damage is larger. On the other hand, we show that a strict emission standard on a cleaner product always improves the environment and the net social surplus associated with the valuation of environmental damage.

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Article provided by Elsevier in its journal Resource and Energy Economics.

Volume (Year): 30 (2008)
Issue (Month): 4 (December)
Pages: 578-584

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Handle: RePEc:eee:resene:v:30:y:2008:i:4:p:578-584
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  1. Kahn, Matthew E., 2007. "Do greens drive Hummers or hybrids? Environmental ideology as a determinant of consumer choice," Journal of Environmental Economics and Management, Elsevier, vol. 54(2), pages 129-145, September.
  2. Cremer, Helmuth & Gahvari, Firouz & Ladoux, Norbert, 2003. "Environmental taxes with heterogeneous consumers: an application to energy consumption in France," Journal of Public Economics, Elsevier, vol. 87(12), pages 2791-2815, December.
  3. José Moraga-González & Noemi Padrón-Fumero, 2002. "Environmental Policy in a Green Market," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 22(3), pages 419-447, July.
  4. Jayadevappa, Ravishankar & Chhatre, Sumedha, 2000. "International trade and environmental quality: a survey," Ecological Economics, Elsevier, vol. 32(2), pages 175-194, February.
  5. Valentini, Laura, 2005. "Environmental quality provision and eco-labelling: Some issues," WTO Staff Working Papers ERSD-2005-02, World Trade Organization (WTO), Economic Research and Statistics Division.
  6. Kohn, Robert E., 2003. "Environmental standards as barriers to trade," Socio-Economic Planning Sciences, Elsevier, vol. 37(3), pages 203-214, September.
  7. Cremer, Helmuth & Gahvari, Firouz & Ladoux, Norbert, 1998. "Externalities and optimal taxation," Journal of Public Economics, Elsevier, vol. 70(3), pages 343-364, December.
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