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Strategic Environmental Policies and the Gains from Trade Liberalization

Author

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  • Kenji Fujiwara

    (Kwansei Gakuin University)

Abstract

The literature on strategic environmental policy has not fully addressed welfare effects of trade liberalization from autarky. In a reciprocal market model of duopoly with transboundary pollution, we study how reductions in transport costs and import tariffs affect the Nash equilibrium welfare of an environmental policy game as compared to any initial state including autarky. We show three patterns of gainfulness of trade depending on the interaction between marginal damage from pollution and the degree of transboundary pollution.

Suggested Citation

  • Kenji Fujiwara, 2010. "Strategic Environmental Policies and the Gains from Trade Liberalization," Discussion Paper Series 54, School of Economics, Kwansei Gakuin University, revised Apr 2010.
    • Handle: RePEc:kgu:wpaper:54
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    Cited by:

    1. Bo Li & Fei Xing & Mark Yu, 2018. "Upstream Pricing Schemes, Trade Liberalization, Trade and Environmental Policies of Downstream Countries," Sustainability, MDPI, vol. 10(7), pages 1-13, July.
    2. Kenji Fujiwara, 2012. "Market integration, environmental policy, and transboundry pollution from consumption," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 21(4), pages 603-614, July.
    3. Alain-Désiré Nimubona, 2012. "Pollution Policy and Trade Liberalization of Environmental Goods," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 53(3), pages 323-346, November.
    4. Tsaur‐Chin Wu & Chin‐Ho Lin & Chia‐Jen Chang, 2024. "Carbon tariffs and environmental policy: Taxes versus standards," International Journal of Economic Theory, The International Society for Economic Theory, vol. 20(3), pages 269-302, September.

    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F18 - International Economics - - Trade - - - Trade and Environment

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