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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- List, John A. & Mason, Charles F., 2001. "Optimal Institutional Arrangements for Transboundary Pollutants in a Second-Best World: Evidence from a Differential Game with Asymmetric Players," Journal of Environmental Economics and Management, Elsevier, vol. 42(3), pages 277-296, November.
- 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.
- 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.
- 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.
- Fernandez, Linda, 2002. "Trade's Dynamic Solutions to Transboundary Pollution," Journal of Environmental Economics and Management, Elsevier, vol. 43(3), pages 386-411, May.
- Damania, Richard & Fredriksson, Per G. & List, John A., 2003. "Trade liberalization, corruption, and environmental policy formation: theory and evidence," Journal of Environmental Economics and Management, Elsevier, vol. 46(3), pages 490-512, November.
- Richard Damania & Per Fredriksson & John List, 2003. "Trade liberalization, corruption, and environmental policy formation: theory and evidence," Natural Field Experiments 00503, The Field Experiments Website.
- Y. Hossein Farzin & Jinhua Zhao, 2003. "Pollution Abatement Investment When Firms Lobby Against Environmental Regulation," Working Papers 2003.82, Fondazione Eni Enrico Mattei.
- 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.
- Kee, Hiau Looi & Olarreaga, Marcelo & Silva, Peri, 2007. "Market access for sale," Journal of Development Economics, Elsevier, vol. 82(1), pages 79-94, January.
- Basak Bayramoglu, 2006. "Transboundary Pollution in the Black Sea: Comparison of Institutional Arrangements," Environmental & Resource Economics, Springer;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).
- 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.
- Damania, Richard & Fredriksson, Per G., 2003. "Trade policy reform, endogenous lobby group formation, and environmental policy," Journal of Economic Behavior & Organization, Elsevier, vol. 52(1), pages 47-69, September.
- Günther Schulze, 1999. "International Trade in Art," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 23(1), pages 109-136, March.
- Baumol,William J. & Oates,Wallace E., 1988. "The Theory of Environmental Policy," Cambridge Books, Cambridge University Press, number 9780521322249, September.
- Baumol,William J. & Oates,Wallace E., 1988. "The Theory of Environmental Policy," Cambridge Books, Cambridge University Press, number 9780521311120, August.
- 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.
- 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. Full references (including those not matched with items on IDEAS)
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