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Southern Export of Dirty "Variety" and Optimality of Environmental Standards : Case of Consumption Pollution


  • Rajat Acharyya

    (CUHK - City University Hong Kong)


This paper examines the optimality of environmental standards that are often observed to be imposed by the importing North on exporting South. In the context of goods differentiated in terms of environmental quality and the degree of consumption pollution they generate, consumers' willingness-to-pay varying with such quality and being different across income groups, we show that : (1) competitive environmental qualities are sub-optimal; (2) environmental-quality dependent consumption tax is the first best policy; and (3) when South has a cost advantage in dirty varities, the second-best policy for North is to lower minimum environmental standard from the autarchic level of minimum standard.

Suggested Citation

  • Rajat Acharyya, 2011. "Southern Export of Dirty "Variety" and Optimality of Environmental Standards : Case of Consumption Pollution," Governance Working Papers 21749, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:govern:21749

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    References listed on IDEAS

    1. Poh Kam Wong & Yuen Ping Ho & Singh, Annette, 2005. "Singapore as an innovative city in East Asia : an explorative study of the perspectives of innovative industries," Policy Research Working Paper Series 3568, The World Bank.
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    4. Naohito Abe & Satoshi Shimizutani, 2005. "Employment Policy and Corporate Governance: An Empirical Comparison of the Stakeholder versus the Profit-Maximization model," Hi-Stat Discussion Paper Series d05-92, Institute of Economic Research, Hitotsubashi University.
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    6. Tetsuji Okazaki, 2004. "Holding Company and Bank: An Historical Comparative Perspective on Corporate Governance in Japan," CIRJE F-Series CIRJE-F-310, CIRJE, Faculty of Economics, University of Tokyo.
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    More about this item


    Environmental quality choice; consumption pollution; environmental standard;

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • P28 - Economic Systems - - Socialist Systems and Transition Economies - - - Natural Resources; Environment
    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts

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