Export Processing Zones and Environmental Policy
This paper investigates the relation between an export processing zone and a pollution quota in a small country. The model suppose that the pollution target is implemented with a marketable permit system, and the government sets the quota to maximize domestic welfare. Then we show that, if an increase in real income reduces marginal external damage, the pollution quota is relieved by the formation of an export processing zone. However, if the marginal damage is augmented with an increase in the income, the optimal quota might be strengthened by the formation of the zone.
|Date of creation:||Aug 2006|
|Date of revision:|
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- Copeland,B.R. & Scott Taylor,M., 2003.
"Trade, growth and the environment,"
10, Wisconsin Madison - Social Systems.
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- Copeland Brian R., 1994. "International Trade and the Environment: Policy Reform in a Polluted Small Open Economy," Journal of Environmental Economics and Management, Elsevier, vol. 26(1), pages 44-65, January.
- Albert G. Schweinberger, 2003. "Special economic zones and quotas on imported intermediate goods: a policy proposal," Oxford Economic Papers, Oxford University Press, vol. 55(4), pages 696-715, October.
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- Devereux, John & Chen, Lein Lein, 1995. "Export Zones and Welfare: Another Look," Oxford Economic Papers, Oxford University Press, vol. 47(4), pages 704-13, October.
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