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International Trade and the Environment: Theoretical and Policy Linkages

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  • J. Neary

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Abstract

I review and extend three approaches to trade and environmental policies: competitive general equilibrium, oligopoly and monopolistic competition. The first two have surprisingly similar implications: deviations from first-best rules are justified only by constraints on policy choice (which motivates what I call a “single dividend” approach to environmental policy), and taxes and emissions standards differ in ways which reflect the Le Chatelier principle. I also show how environmental taxes may lead to a catastrophic relocation of industry in the presence of agglomeration effects, although not necessarily if there is a continuum of industries which differ in pollution intensity. Copyright Springer 2006

Suggested Citation

  • J. Neary, 2006. "International Trade and the Environment: Theoretical and Policy Linkages," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 33(1), pages 95-118, January.
  • Handle: RePEc:kap:enreec:v:33:y:2006:i:1:p:95-118
    DOI: 10.1007/s10640-005-1707-4
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Christos Kotsogiannis & Alan Woodland, 2018. "Climate Change, Strict Pareto Improvements in Welfare and Multilateral Income Transfers," Discussion Papers 2018-04, School of Economics, The University of New South Wales.
    2. Costantini, Valeria & Crespi, Francesco, 2008. "Environmental regulation and the export dynamics of energy technologies," Ecological Economics, Elsevier, vol. 66(2-3), pages 447-460, June.
    3. Erwin Bulte & Edward Barbier, 2005. "Trade and Renewable Resources in a Second Best World: An Overview," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 30(4), pages 423-463, April.
    4. Phoebe Koundouri & Fabio Antoniou & Panos Hatzipanayotou, 2009. "Tradable Permits vs Ecological Dumping," DEOS Working Papers 1002, Athens University of Economics and Business.
    5. Rupayan Pal, 2012. "Delegation And Emission Tax In A Differentiated Oligopoly," Manchester School, University of Manchester, vol. 80(6), pages 650-670, December.
    6. Naghavi, Alireza, 2007. "Can R&D-inducing green tariffs replace international environmental regulations?," Resource and Energy Economics, Elsevier, vol. 29(4), pages 284-299, November.
    7. repec:bla:worlde:v:40:y:2017:i:8:p:1646-1666 is not listed on IDEAS
    8. Chi-Chur Chao & Eden S. H. Yu, 2015. "Environmental Impacts of Tariff and Tax Reforms Under Origin and Destination Principles," Pacific Economic Review, Wiley Blackwell, vol. 20(2), pages 310-322, May.
    9. Laixun Zhao & Tetsugen Haruyama, 2017. "Plant Location, Wind Direction and Pollution Policy Under Offshoring," The World Economy, Wiley Blackwell, vol. 40(8), pages 1646-1666, August.
    10. Odd Rune Straume, 2006. "Product Market Integration and Environmental Policy Coordination in An International Duopoly," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 34(4), pages 535-563, August.

    More about this item

    Keywords

    environmental policy; international trade policy; location and economic geography; pollution abatement; strategic trade policy; O13; L13; F12;

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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