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International Trade and Conservation with Costly Natural Resource Management

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  • Bergeron, Nancy

Abstract

We propose a model where the benevolent resource planner's management is endogenous. This allows for the analysis of trade models with management régimes other than the polar open access and 1st best régimes. Interestingly, 2nd best, endogenous, management régimes are more realistic than the textbook 1st best policy prescription. In a very simple model where current gains do not depend on the resource stock, and where resource management incurs a fixed cost, we have disproved, some statements made by the WTO. Indeed, in our 2nd best setting, free trade with "proper" management of resources can lead to welfare losses. It can also cause the extinction of a species and therefore hinder the environment. Further research is underway with more general assumptions. We expect that our results regarding WTO statements and questions will be mitigated, but they should still hold true under some conditions. We know that trade can be welfare increasing and it can help the environment. However, knowing when it does not and why can be helpful for policy-making. This is what we attempt to figure out in this paper.

Suggested Citation

  • Bergeron, Nancy, 2002. "International Trade and Conservation with Costly Natural Resource Management," Cahiers de recherche 0204, GREEN.
  • Handle: RePEc:lvl:lagrcr:0204
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    File URL: http://www.green.ecn.ulaval.ca/chaire/2002/2002-3.pdf
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    References listed on IDEAS

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    5. Ali Emami & Richard S. Johnston, 2000. "Unilateral Resource Management in a Two-Country General Equilibrium Model of Trade in a Renewable Fishery Resource," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(1), pages 161-172.
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    7. Berck, Peter, 1979. "Open Access and Extinction," Econometrica, Econometric Society, vol. 47(4), pages 877-882, July.
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    12. Brian R. Copeland & M. Scott Taylor, 1994. "North-South Trade and the Environment," The Quarterly Journal of Economics, Oxford University Press, vol. 109(3), pages 755-787.
    13. H. Scott Gordon, 1954. "The Economic Theory of a Common-Property Resource: The Fishery," Journal of Political Economy, University of Chicago Press, vol. 62, pages 124-124.
    14. Gould, J R, 1972. "Extinction of a Fishery by Commercial Exploitation: A Note," Journal of Political Economy, University of Chicago Press, vol. 80(5), pages 1031-1038, Sept.-Oct.
    15. Hotte, Louis & Long, Ngo Van & Tian, Huilan, 2000. "International trade with endogenous enforcement of property rights," Journal of Development Economics, Elsevier, vol. 62(1), pages 25-54, June.
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    Cited by:

    1. Copeland, Brian R., 2005. "Policy Endogeneity and the Effects of Trade on the Environment," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 34(1), April.

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