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Comparative Advantage, Trade, and Transboundary Pollution

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  • Carol Lehr
  • John Maxwell

Abstract

It is common for studies on trade and environment issues to model trade patterns as driven by environmental considerations. Under conditions of trade liberalization, these studies predict the rise of pollution havens and an increase in global pollution. The extant empirical literature, however, gives only mixed support at best for the notion that trade patterns are influenced by environmental issues. We develop a simple model to investigate whether trade based on traditional comparative advantage may lead to increased global pollution. We find that trade may lead to increased global pollution if both trading nations exhibit increasing marginal disutilities of pollution. Copyright Kluwer Academic Publishers 2000

Suggested Citation

  • Carol Lehr & John Maxwell, 2000. "Comparative Advantage, Trade, and Transboundary Pollution," Open Economies Review, Springer, vol. 11(3), pages 205-227, July.
    • Handle: RePEc:kap:openec:v:11:y:2000:i:3:p:205-227
    DOI: 10.1023/A:1008370706461
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    References listed on IDEAS

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    1. Baldwin, Robert E., 1984. "Trade policies in developed countries," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 1, chapter 12, pages 571-619, Elsevier.
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    8. McGuire, Martin C., 1982. "Regulation, factor rewards, and international trade," Journal of Public Economics, Elsevier, vol. 17(3), pages 335-354, April.
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    Cited by:

    1. 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.

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