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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- 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.
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- Nagase, Yoko & Silva, Emilson C.D., 2007. "Acid rain in China and Japan: A game-theoretic analysis," Regional Science and Urban Economics, Elsevier, vol. 37(1), pages 100-120, January.
- 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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- Nordström, Håkan & Vaughan, Scott, 1999. "Trade and the environment," WTO Special Studies, World Trade Organization (WTO), Economic Research and Statistics Division, volume 4, number 4, December.
- repec:cup:cbooks:9780521322249 is not listed on IDEAS
- repec:cup:cbooks:9780521311120 is not listed on IDEAS
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