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Trade Integration, Environmental Degradation, and Public Health in Chile: Assessing the Linkages

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  • Beghin, John C.
  • Bowland, Brad J.
  • Dessus, Sebastien
  • Roland-Holst, David
  • Van der Mensbrugghe, Dominique

Abstract

We use an empirical simulation model to examine links between trade integration, pollution, and public health in Chile. We synthesize economic, engineering, and health data to elucidate this complex relationship and support more coherent policy. Trade integration scenarios examined include Chile's accession to the NAFTA, MERCOSUR, and unilateral opening to world markets. The latter scenario induces substantial worsening of pollution, partly because it facilitates access to cheaper and dirty energy, and has a significant negative effect on urban morbidity and mortality. Damages caused by rising morbidity and mortality are of similar magnitude and substantial. Emissions of small particulates, SO2, and NO2, have the strongest impact on local mortality and morbidity. These three pollutants appear to be complementary in economic activity. Unilateral trade integration combined with a tax on small particulates brings welfare gains, which are 16 per cent higher than those obtained under unilateral trade reform alone.

Suggested Citation

  • Beghin, John C. & Bowland, Brad J. & Dessus, Sebastien & Roland-Holst, David & Van der Mensbrugghe, Dominique, 2002. "Trade Integration, Environmental Degradation, and Public Health in Chile: Assessing the Linkages," Staff General Research Papers Archive 5121, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genres:5121
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    References listed on IDEAS

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    1. O'Ryan, Raul E., 1996. "Cost-Effective Policies to Improve Urban Air Quality in Santiago, Chile," Journal of Environmental Economics and Management, Elsevier, vol. 31(3), pages 302-313, November.
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    1. repec:eee:resene:v:50:y:2017:i:c:p:135-163 is not listed on IDEAS
    2. O'Ryan, Raúl & de Miguel, Carlos J. & Miller, Sebastian & Munasinghe, Mohan, 2005. "Computable general equilibrium model analysis of economywide cross effects of social and environmental policies in Chile," Ecological Economics, Elsevier, vol. 54(4), pages 447-472, September.
    3. Mundaca T., Luis, 2013. "Climate change and energy policy in Chile: Up in smoke?," Energy Policy, Elsevier, vol. 52(C), pages 235-248.
    4. He, Jie, 2005. "Estimating the economic cost of China's new desulfur policy during her gradual accession to WTO: The case of industrial SO2 emission," China Economic Review, Elsevier, vol. 16(4), pages 364-402.
    5. Nasir, Muhammad & Ur Rehman, Faiz, 2011. "Environmental Kuznets Curve for carbon emissions in Pakistan: An empirical investigation," Energy Policy, Elsevier, vol. 39(3), pages 1857-1864, March.
    6. Anriquez, Gustavo, 2002. "Trade And The Environment: An Economic Literature Survey," Working Papers 28598, University of Maryland, Department of Agricultural and Resource Economics.
    7. Mani, Muthukumara & Markandya, Anil & Sagar, Aarsi & Sahin, Sebnem, 2012. "India’s economic growth and environmental sustainability : what are the tradeoffs ?," Policy Research Working Paper Series 6208, The World Bank.
    8. Raúl O’Ryan & Carlos J. de Miguel & Sebastián Miller, 2003. "The ECOGEM-Chile Model: A CGE Model for Environmental and Trade Policy Analysis," Working Papers Central Bank of Chile 247, Central Bank of Chile.
    9. Raúl O´Ryan & Carlos J. De Miguel & Sebastián Miller, 2005. "General Equilibrium Analysis of a Fuel Tax Increase in Chile," Central Banking, Analysis, and Economic Policies Book Series,in: Rómulo A. Chumacero & Klaus Schmidt-Hebbel & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (S (ed.), General Equilibrium Models for the Chilean Economy, edition 1, volume 9, chapter 10, pages 345-374 Central Bank of Chile.
    10. Faiz Rehman & Muhammad Nasir & Faiza Kanwal, 2012. "Nexus between corruption and regional Environmental Kuznets Curve: the case of South Asian countries," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, pages 827-841.
    11. Raúl O'Ryan & Carlos J. de Miguel & Sebastian Miller, 2005. "A Cge Model for Environmental and Trade Policy Analysis in Chile: Case Study for Fuel Tax Increases," Documentos de Trabajo 211, Centro de Economía Aplicada, Universidad de Chile.
    12. O’RYAN Raul & DE MIGUEL Carlos & MILLER Sebastián & MUNASINGHE Mohan, "undated". "General Equilibrium Analysis of Cross Effects in Social and Environmental Policies: Case Study of Chile," EcoMod2003 330700114, EcoMod.
    13. Liu, Xianbing & Ishikawa, Masanobu & Wang, Can & Dong, Yanli & Liu, Wenling, 2010. "Analyses of CO2 emissions embodied in Japan-China trade," Energy Policy, Elsevier, vol. 38(3), pages 1510-1518, March.

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