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Trade, Politics,and the Environment: Tailpipe vs. Smokestack

  • McAusland, Carol

Economists interested in the interaction between trade, politics and the environ-ment have restricted their attention almost exclusively to the problem of production related—“smokestack†—pollution. We instead consider consumption related—“tailpipe†—pollution and show that this can reverse a number of core results. For example, we show that the impact of regulation on trade patterns depends on the type of pollution being regulated: while strict smokestack regula-tion dampens exports of pollution intensive goods, tailpipe regulation may promote these exports. Similarly, we show that pollution type may fundamentally alter the impact of openness on political opposition to environmental regulation: while openness may make dirty industry oppose smokestack regulation more vociferously, it can make industry a less ardent enemy of tailpipe regulation.

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Paper provided by Department of Economics, UC Santa Barbara in its series University of California at Santa Barbara, Economics Working Paper Series with number qt0406x646.

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Date of creation: 01 Dec 2003
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Handle: RePEc:cdl:ucsbec:qt0406x646
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  1. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-50, September.
  2. Damania, Richard & Fredriksson, Per G. & List, John A., 2003. "Trade liberalization, corruption, and environmental policy formation: theory and evidence," Journal of Environmental Economics and Management, Elsevier, vol. 46(3), pages 490-512, November.
  3. McAusland, Carol, 2003. "Voting for pollution policy: the importance of income inequality and openness to trade," Journal of International Economics, Elsevier, vol. 61(2), pages 425-451, December.
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  7. Schleich, Joachim, 1999. "Environmental quality with endogenous domestic and trade policies1," European Journal of Political Economy, Elsevier, vol. 15(1), pages 53-71, March.
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  12. repec:cdl:ucsbec:11-99 is not listed on IDEAS
  13. Schleich, Joachim & Orden, David, 2000. "Environmental Quality and Industry Protection with Noncooperative versus Cooperative Domestic and Trade Policies," Review of International Economics, Wiley Blackwell, vol. 8(4), pages 681-97, November.
  14. Krutilla, Kerry, 1991. "Environmental regulation in an open economy," Journal of Environmental Economics and Management, Elsevier, vol. 20(2), pages 127-142, March.
  15. Josh Ederington & Jenny Minier, 2003. "Is environmental policy a secondary trade barrier? An empirical analysis," Canadian Journal of Economics, Canadian Economics Association, vol. 36(1), pages 137-154, February.
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  18. Deacon, Robert & Norman, Catherine S, 2004. "Is the environmental Kuznets curve an empirical regularity?," University of California at Santa Barbara, Economics Working Paper Series qt2m44f7kr, Department of Economics, UC Santa Barbara.
  19. Oates, Wallace E. & Schwab, Robert M., 1988. "Economic competition among jurisdictions: efficiency enhancing or distortion inducing?," Journal of Public Economics, Elsevier, vol. 35(3), pages 333-354, April.
  20. Rauscher, Michael, 1997. "International Trade, Factor Movements, and the Environment," OUP Catalogue, Oxford University Press, number 9780198290506, December.
  21. Mody, Ashoka & Roy, Subhendu & Wheeler, David & Dasgupta, Susmita, 1995. "Environmental regulation and development : a cross-country empirical analysis," Policy Research Working Paper Series 1448, The World Bank.
  22. Eliste, Paavo & Fredriksson, Per G., 2002. "Environmental Regulations, Transfers, and Trade: Theory and Evidence," Journal of Environmental Economics and Management, Elsevier, vol. 43(2), pages 234-250, March.
  23. McAusland, Carol, 2005. "Harmonizing tailpipe policy in symmetric countries: Improve the environment, improve welfare?," Journal of Environmental Economics and Management, Elsevier, vol. 50(2), pages 229-251, September.
  24. Deacon, Robert, 1999. "The Political Economy of Environment-Development Relationships: A Preliminary Framework," University of California at Santa Barbara, Economics Working Paper Series qt8h33b5c0, Department of Economics, UC Santa Barbara.
  25. Siebert, Horst, 1979. "Environmental policy in the two-country-case," Open Access Publications from Kiel Institute for the World Economy 3526, Kiel Institute for the World Economy (IfW).
  26. Gulati, Sumeet, 2003. "The Effect Of Free Trade On Pollution Policy And Welfare," Working Papers 15849, University of British Columbia, Food and Resource Economics.
  27. Brian R. Copeland & M. Scott Taylor, 1995. "Trade and the Environment: A Partial Synthesis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(3), pages 765-771.
  28. Swee Chua, 2003. "Does tighter environmental policy lead to a comparative advantage in less polluting goods?," Oxford Economic Papers, Oxford University Press, vol. 55(1), pages 25-35, January.
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