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

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  • 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)

Abstract

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.

Suggested Citation

  • Hélène Ollivier, 2016. "North–South Trade and Heterogeneous Damages from Local and Global Pollution," PSE - Labex "OSE-Ouvrir la Science Economique" hal-01308612, HAL.
  • 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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    References listed on IDEAS

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    Cited by:

    1. Thais NUNEZ-ROCHA & Inmaculada MARTíNEZ-ZARZOSO, 2018. "Is National Environmental Legislation Affecting Emissions?," LEO Working Papers / DR LEO 2505, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    2. Karine Constant & Marion Davin, 2018. "Unequal vulnerability to climate change and the transmission of adverse effects through international trade," CEE-M Working Papers 18-05, CEE-M, Universitiy of Montpellier, CNRS, INRA, Montpellier SupAgro.

    More about this item

    Keywords

    International trade; Multiple pollutants; Heterogeneous damages;

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • 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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