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North–South Trade and Heterogeneous Damages from Local and Global Pollution

Listed author(s):
  • Hélène Ollivier

    ()

    (PSE - Paris School of Economics, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

This paper examines how income-induced environmental policy differences and damage heterogeneity interact to determine the comparative advantage in a polluting activity. In a non-cooperative framework, North and South regulate two types of pollution, local pollution (e.g., air and water pollution) and global pollution (e.g., greenhouse gas emissions), each of which induces heterogeneous damages for consumers. I find that (1) North or South can have the comparative advantage in the dirty sector; (2) whatever the region with this comparative advantage, the worldwide level of global pollution can either increase or decrease with trade; (3) local and global emissions evolve symmetrically in each region with trade, even though pollution regulations may be asymmetric.

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Paper provided by HAL in its series PSE - Labex "OSE-Ouvrir la Science Economique" with number hal-01308612.

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Date of creation: 2016
Publication status: Published in Environmental and Resource Economics, Springer, 2016, pp.first online. 〈10.1007/s10640-015-9902-4〉
Handle: RePEc:hal:pseose:hal-01308612
DOI: 10.1007/s10640-015-9902-4
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01308612
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