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Exports and Externalities: the other side of trade and ecological risk and Technology Diffusion in a Competitive World

Author

Listed:
  • Travis Warziniack

    () (University of Heidelberg, Department of Economics)

  • David Finnoff

    () (University of Wyoming)

  • Jason F. Shogren

    () (University of Wyoming)

  • Jonathan Bossenbroek

    () (University of Toledo)

  • David Lodge

    () (University of Notre Dame)

Abstract

This paper develops a general equilibrium model to measure welfare effects of taxes for correcting environmental externalities caused by domestic trade, focusing on exter- nalities that arise through exports. Externalities from exports come from a number of sources. Domestically owned ships, planes, and automobiles can become contaminated while visiting other regions and bring unwanted pests home, and species can be in- troduced by contaminated visitors that enter a region to consume goods and services. The paper combines insights from the public finance literature on corrective environ- mental taxes and trade literature on domestically provided services. We find that past methods for measuring welfare effects are inadequate for a wide range of externalities and show the most widely used corrective mechanism, taxes on the sector imposing the environmental externality, may often do more harm than good. The motivation for this paper is the expansion of invasive species' ranges within the United States. We apply our analytical model to the specifc example of quagga and zebra mussel (Dreissena polymorpha and Dreissena rostiformis bugenis) invasion into the U.S Pacific Northwest.

Suggested Citation

  • Travis Warziniack & David Finnoff & Jason F. Shogren & Jonathan Bossenbroek & David Lodge, 2009. "Exports and Externalities: the other side of trade and ecological risk and Technology Diffusion in a Competitive World," Working Papers 0481, University of Heidelberg, Department of Economics.
  • Handle: RePEc:awi:wpaper:0481
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    File URL: http://www.uni-heidelberg.de/md/awi/forschung/dp481.pdf
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    More about this item

    Keywords

    environmental regulation; tax interactions; invasive species; environment and trade;

    JEL classification:

    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources
    • Q27 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Issues in International Trade
    • 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
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
    • F18 - International Economics - - Trade - - - Trade and Environment

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