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Pollution Policy and Liberalization of Trade in Environmental Goods

  • Alain-Désiré Nimubona

    (Department of Economics, University of Waterloo)

During the Doha Round at the World Trade Organization (WTO), reductions in trade barriers on environmental goods (EG) were put forward as a means of helping developed and developing countries alike deal with current environmental problems. We examine the potential effectiveness of such a strategy in countries that rely on imports for their needs in EG. We point out that liberalizing trade in EG might in fact lead to less stringent environmental regulations, resulting in an actual rise in pollution levels. We then show conditions under which the environmental effectiveness and the welfare improvement objective of this trade reform are compromised.

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File URL: http://economics.uwaterloo.ca/documents/10-004ADN.pdf
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Paper provided by University of Waterloo, Department of Economics in its series Working Papers with number 1004.

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Length: 35 pages
Date of creation: May 2010
Date of revision: May 2010
Handle: RePEc:wat:wpaper:1004
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