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

Listed author(s):
  • Beghin, John C.
  • Bowland, Brad J.
  • Dessus, Sebastien
  • Roland-Holst, David
  • Van der Mensbrugghe, Dominique

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.

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Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers Archive with number 5121.

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Date of creation: 25 Apr 2002
Publication status: Published in Environment and Development Economics, May 2002, vol. 7 no. 02, pp. 241-267
Handle: RePEc:isu:genres:5121
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Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070

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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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