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North–South Trade and Heterogeneous Damages from Local and Global Pollution

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  • Hélène Ollivier

    (Paris School of Economics - CNRS)

Abstract

This paper examines how income-induced environmental policy differences and damage heterogeneity interact to determine the comparative advantage in a polluting activity. In a non-cooperative framework, North and South regulate two types of pollution, local pollution (e.g., air and water pollution) and global pollution (e.g., greenhouse gas emissions), each of which induces heterogeneous damages for consumers. I find that (1) North or South can have the comparative advantage in the dirty sector; (2) whatever the region with this comparative advantage, the worldwide level of global pollution can either increase or decrease with trade; (3) local and global emissions evolve symmetrically in each region with trade, even though pollution regulations may be asymmetric.

Suggested Citation

  • Hélène Ollivier, 2016. "North–South Trade and Heterogeneous Damages from Local and Global Pollution," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(2), pages 337-355, October.
  • Handle: RePEc:kap:enreec:v:65:y:2016:i:2:d:10.1007_s10640-015-9902-4
    DOI: 10.1007/s10640-015-9902-4
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    Cited by:

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    2. Fang Yang & Qinfan Gan, 2021. "Impact of Regional Environmental Regulations on Taiwanese Investment in Mainland China," Sustainability, MDPI, vol. 13(8), pages 1-18, April.
    3. Mengqi Gong & Zhe You & Linting Wang & Jinhua Cheng, 2020. "Environmental Regulation, Trade Comparative Advantage, and the Manufacturing Industry’s Green Transformation and Upgrading," IJERPH, MDPI, vol. 17(8), pages 1-17, April.
    4. Thais NUNEZ-ROCHA & Inmaculada MARTíNEZ-ZARZOSO, 2018. "Is National Environmental Legislation Affecting Emissions?," LEO Working Papers / DR LEO 2505, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    5. Zhang, Dongyang, 2022. "Environmental regulation and firm product quality improvement: How does the greenwashing response?," International Review of Financial Analysis, Elsevier, vol. 80(C).
    6. Xin Liu & Zhiyong Kang, 2022. "Environmental Policy and Exports in China: An Analysis Based on the Top 10,000 Energy-Consuming Enterprises Program," Sustainability, MDPI, vol. 14(21), pages 1-16, October.

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    More about this item

    Keywords

    Multiple pollutants; Heterogeneous damages; International trade;
    All these keywords.

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • 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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