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International treaties on trade and global pollution


  • CHANDER, Parkash

    () (Indian Statistical Institute and Université catholique de Louvain,Center for Operations Research and Econometrics, Louvain-la-Neuve, Belgium)

  • KHAN, Ali

    (The Johns Hopkins University)


The paper shows that global pollution need not rise under free trade in goods and/or emissions even in the complete absence of income effects. Differences in environmental concerns across the countries lead to differences in the pollutionintensity of production and thus generate the possibility of increasing world output and income without increasing the world pollution by shifting the production of the polluting good from the country with higher pollution-intensity of production to the country with lower one. We show that free trade in goods and/or emissions can induce precisely such a shifting of production with the country with greater environmental concern exporting the polluting good. The paper also demonstrates the possibility of a first-best international treaty on global pollution in which each country or group of countries is better-off.

Suggested Citation

  • CHANDER, Parkash & KHAN, Ali, 1999. "International treaties on trade and global pollution," CORE Discussion Papers 1999003, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:1999003

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    References listed on IDEAS

    1. Parkash Chander & Henry Tulkens, 1995. "A core-theoretic solution for the design of cooperative agreements on transfrontier pollution," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 2(2), pages 279-293, August.
    2. Rauscher, Michael, 1991. "National environmental policies and the effects of economic integration," European Journal of Political Economy, Elsevier, vol. 7(3), pages 313-329, October.
    3. Grossman, Gene M & Helpman, Elhanan, 1995. "The Politics of Free-Trade Agreements," American Economic Review, American Economic Association, vol. 85(4), pages 667-690, September.
    4. Henry Tulkens & Parkash Chander, 1997. "The Core of an Economy with Multilateral Environmental Externalities," International Journal of Game Theory, Springer;Game Theory Society, vol. 26(3), pages 379-401.
    5. Brian R. Copeland & M. Scott Taylor, 1997. "A Simple Model of Trade, Capital Mobility, and the Environment," NBER Working Papers 5898, National Bureau of Economic Research, Inc.
    6. Adam B. Jaffe et al., 1995. "Environmental Regulation and the Competitiveness of U.S. Manufacturing: What Does the Evidence Tell Us?," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 132-163, March.
    7. Richelle, Yves, 1996. "Trade Incidence on Transboundary Pollution: Free Trade Can Benefit the Global Environmental Quality," Cahiers de recherche 9616, Université Laval - Département d'économique.
    8. Chander, Parkash & Tulkens, Henry, 1992. "Theoretical foundations of negotiations and cost sharing in transfrontier pollution problems," European Economic Review, Elsevier, vol. 36(2-3), pages 388-399, April.
    9. James R. Markusen, 1975. "Cooperative Control of International Pollution and Common Property Resources," The Quarterly Journal of Economics, Oxford University Press, vol. 89(4), pages 618-632.
    10. Beladi, Hamid & Chau, Nancy H. & Ali Khan, M., 2000. "North-South Investment Flows and Optimal Environmental Policies," Journal of Environmental Economics and Management, Elsevier, vol. 40(3), pages 275-296, November.
    11. Copeland, Brian R & Taylor, M Scott, 1995. "Trade and Transboundary Pollution," American Economic Review, American Economic Association, vol. 85(4), pages 716-737, September.
    12. Richelle, Y., 1996. "Trade Incidence on Transboundary Pollution: Free Trade Can Benefit the Global Environmental Quality," Papers 9616, Laval - Recherche en Politique Economique.
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    Cited by:

    1. Marc Germain & Philippe Monfort & Thierry Bréchet, 2006. "Allocation des efforts de dépollution dans des économies avec spécialisation internationale," Revue économique, Presses de Sciences-Po, vol. 57(2), pages 219-239.
    2. Beladi, Hamid & Oladi, Reza, 2011. "Does trade liberalization increase global pollution?," Resource and Energy Economics, Elsevier, vol. 33(1), pages 172-178, January.
    3. Thierry, BRECHET & Marc, GERMAIN & Philippe, MONFORT, 2003. "Spécialisation internationale et partage de la charge en matière de réduction de la pollution," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2003019, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    4. Meeta Mehra & Satya Das, 2008. "North–South Trade and Pollution Migration: The Debate Revisited," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 40(1), pages 139-164, May.

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