Trade and Trees

Bard Harstad

Research Papers from Stanford University, Graduate School of Business

Abstract: International trade and natural resource exploitation interact in multiple ways. This paper first presents a dynamic game in which the South (S) exploits (e.g., deforests) in order to export (e.g., lumber or agricultural products). Because of negative externalities, the North might lose from trade, unless the resource has already been depleted. Anticipating this, S exploits more. All negative results are reversed if renegotiation-proof tariffs can be contingent on the size of the remaining resource stock. Larger gains from trade, and more attractive terms of trade, can be used to slow exploitation. Combined with export subsidies, the outcome is first best.

JEL-codes: F13 F18 F55 Q37 Q56 (search for similar items in EconPapers)
Date: 2023-10
New Economics Papers: this item is included in nep-agr, nep-env, nep-gth, nep-int and nep-mac
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https://www.gsb.stanford.edu/faculty-research/working-papers/trade-trees

Related works:
Journal Article: Trade and Trees (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:ecl:stabus:4127

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