Trade, Transboundary, Pollution, and Foreign Lobbying
In this paper, we explore the use of trade policy in addressing transboundary stock pollution problems such as acid rain and water pollution. We show that a tariff determined by the current level of accumulated pollution can induce the time path of emissions optimal for the downstream (polluted) country. But if the upstream (polluting) country can lobby the downstream government to impose lower tariffs, distortions brought by corruption and foreign lobbying lead to a rise in the upstream country’s social welfare, and to a decrease in social welfare in the downstream country. Thus, the usefulness of trade policy as a tool for encouraging cooperation and internalizing transboundary externalities depends critically on the degree of governments’ susceptibility to foreign political influence.
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- Y. Hossein Farzin & Jinhua Zhao, 2003. "Pollution Abatement Investment When Firms Lobby Against Environmental Regulation," Working Papers 2003.82, Fondazione Eni Enrico Mattei.
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- Kee, Hiau Looi & Olarreaga, Marcelo & Silva, Peri, 2004.
"Market access for sale : Latin America's lobbying for U.S. tariff preferences,"
Policy Research Working Paper Series
3198, The World Bank.
- Kee, Hiau Looi & Olarreaga, Marcelo & Silva, Peri, 2003. "Market Access for Sale: Latin America's Lobbying for US Tariff Preferences," CEPR Discussion Papers 4077, C.E.P.R. Discussion Papers.
- Basak Bayramoglu, 2006.
"Transboundary Pollution in the Black Sea: Comparison of Institutional Arrangements,"
Environmental & Resource Economics,
European Association of Environmental and Resource Economists, vol. 35(4), pages 289-325, December.
- Basak Bayramoglu, 2004. "Transboundary pollution in the black sea : comparison of institutional arrangements," Cahiers de la Maison des Sciences Economiques v04020, Université Panthéon-Sorbonne (Paris 1).
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- repec:cup:cbooks:9780521311120 is not listed on IDEAS
- repec:cup:cbooks:9780521322249 is not listed on IDEAS
- Nagase, Yoko & Silva, Emilson C. D., 2000. "Optimal Control of Acid Rain in a Federation with Decentralized Leadership and Information," Journal of Environmental Economics and Management, Elsevier, vol. 40(2), pages 164-180, September.
- Barbier, Edward B. & Damania, Richard & Leonard, Daniel, 2005. "Corruption, trade and resource conversion," Journal of Environmental Economics and Management, Elsevier, vol. 50(2), pages 276-299, September.
- Günther Schulze, 1999. "International Trade in Art," Journal of Cultural Economics, Springer, vol. 23(1), pages 109-136, March.
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- Dockner Engelbert J. & Van Long Ngo, 1993. "International Pollution Control: Cooperative versus Noncooperative Strategies," Journal of Environmental Economics and Management, Elsevier, vol. 25(1), pages 13-29, July.
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