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Transboundary Movement of Waste: Second-hand Markets and Illegal Shipments

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  • Sophie Bernard

Abstract

In a stylized model of international trade, firms in the North indirectly export second-hand products to a representative firm in the South to be reused as intermediate goods, with potential trade gains. The level of reusability of waste products is a crucial choice variable in the North. This is because, in the presence of imperfect international monitoring, non-reusable waste can be illegally mixed with reusable waste. I explore the driving forces for illegal waste movement, with a particular focus on local waste regulations such as the EU's Directive on Waste Electrical and Electronic Equipment. Under mild conditions, it is shown that increasingly stringent regulations in the North induce Northern firms to reduce product reusability. Consequently, the flow of non-reusable waste to the South increases, magnifying the pollution haven effect.

Suggested Citation

  • Sophie Bernard, 2011. "Transboundary Movement of Waste: Second-hand Markets and Illegal Shipments," CIRANO Working Papers 2011s-77, CIRANO.
  • Handle: RePEc:cir:cirwor:2011s-77
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    File URL: http://www.cirano.qc.ca/files/publications/2011s-77.pdf
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    References listed on IDEAS

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    Cited by:

    1. Alló, Maria & Loureiro, Maria L., 2013. "Estimating a meta-damage regression model for large accidental oil spills," Ecological Economics, Elsevier, vol. 86(C), pages 167-175.

    More about this item

    Keywords

    waste; second-hand products; environmental regulations; trade; green design; illegal market;

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • 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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