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Trade and Pollution Linkages: Piecemeal Reform and Optimal Intervention

Listed author(s):
  • 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 ...

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Paper provided by OECD Publishing in its series OECD Development Centre Working Papers with number 99.

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Date of creation: 01 Oct 1994
Handle: RePEc:oec:devaaa:99-en
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