Export Processing Zones and Environmental Policy

Yasuyuki Sugiyama ()
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Yasuyuki Sugiyama: Graduate School of Economics, Osaka University

No 06-22, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: This paper investigates the relation between an export processing zone and a pollution quota in a small country. The model suppose that the pollution target is implemented with a marketable permit system, and the government sets the quota to maximize domestic welfare. Then we show that, if an increase in real income reduces marginal external damage, the pollution quota is relieved by the formation of an export processing zone. However, if the marginal damage is augmented with an increase in the income, the optimal quota might be strengthened by the formation of the zone.

Keywords: export processing zone; international trade; environmental policy; pollution (search for similar items in EconPapers)
JEL-codes: F18 O24 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2006-08
New Economics Papers: this item is included in nep-dev, nep-env, nep-int and nep-res
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Persistent link: https://EconPapers.repec.org/RePEc:osk:wpaper:0622

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