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Trade and Pollution Linkages: Piecemeal Reform and Optimal Intervention


  • John Beghin
  • David Roland-Holst
  • Dominique van der Mensbrugghe


Linkages between international trade and the domestic environment are receiving intensified scrutiny by researchers and policy makers alike. This is especially the case in developing countries, where trade can be a significant agent of change and growth. While trade policies are increasingly oriented toward lower levels of intervention, interventionist policies are increasingly being implemented to correct for negative environmental externalities. In such a situation, the interactions between the two can be complex and challenging for policy makers. This paper explores second-best policy issues affecting trade and environmental linkages. We derive optimum policy interventions and sufficient conditions for welfareimproving piecemeal trade and environmental policy reforms in a small economy. Pollution originates in both domestic consumption and production and is a domestic public bad. Production pollution can be abated by decreasing output and/or decreasing effluent rates per unit of ... Les liens entre le commerce international et l'environnement local font l'objet d'un examen très attentif tant de la part des chercheurs que de la part des décideurs. Cela est particulièrement le cas dans les pays en développement où le commerce peut être un facteur significatif de changement qualitatif et matériel du niveau de vie. Si les politiques commerciales sont de plus en plus orientées vers la libéralisation, en revanche, les politiques d'intervention servent de plus en plus à corriger les externalités négatives sur l'environnement. Dans un tel contexte, les interactions se produisant entre ces deux types de politiques peuvent être d'une nature complexe et représenter un défi pour les décideurs. Ce document étudie les aspects de ces politiques de second ordre qui ont une incidence sur les liens entre le commerce et l'environnement. Il déduit les politiques d'intervention optimales et les conditions suffisantes pour une amélioration du bien-être induites par des réformes ...

Suggested Citation

  • John Beghin & David Roland-Holst & Dominique van der Mensbrugghe, 1994. "Trade and Pollution Linkages: Piecemeal Reform and Optimal Intervention," OECD Development Centre Working Papers 99, OECD Publishing.
  • Handle: RePEc:oec:devaaa:99-en

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    1. Hall, Robert E, 1978. "Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 971-987, December.
    2. Jeffrey D. Sachs, 1989. "Developing Country Debt and Economic Performance. The International Financial System," NBER Chapters,in: Developing Country Debt and Economic Performance, Volume 1: The International Financial System, pages -12 National Bureau of Economic Research, Inc.
    3. Jeffrey D. Sachs, 1989. "Developing Country Debt and the World Economy," NBER Books, National Bureau of Economic Research, Inc, number sach89-3, January.
    4. Philippe Callier, 1989. "Debt Relief and Adjustment Incentives in a Financially Open Economy: Comment on Corden," IMF Staff Papers, Palgrave Macmillan, vol. 36(2), pages 514-522, June.
    5. W. Max Corden, 1988. "Debt Relief and Adjustment Incentives," IMF Staff Papers, Palgrave Macmillan, vol. 35(4), pages 628-643, December.
    6. Alain Ize & Guillermo Ortiz, 1987. "Fiscal Rigidities, Public Debt, and Capital Flight," IMF Staff Papers, Palgrave Macmillan, vol. 34(2), pages 311-332, June.
    7. Jeffrey D. Sachs, 1989. "Introduction to "Developing Country Debt and the World Economy"," NBER Chapters,in: Developing Country Debt and the World Economy, pages 1-34 National Bureau of Economic Research, Inc.
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