International Trade and the Internalization of Environmental Damages

Larry Karp, Christopher F. Dumas, Bonwoo Koo and Sandeep Sacheti

Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series from Department of Agricultural & Resource Economics, UC Berkeley

Abstract: This paper contributes to the growing effort to synthesize the fields of trade policy and environmental policy. We discuss: the question of whether international trade undercuts unilateral internalization policies: the role of income constraints in environmental policy; and the possibility of using trade policy to achieve environmental objectives. We review estimates of environmental damage in agricultural production and processing, and we summarize current policy measures. We use a static empirical model to estimate the effects of several internalization policies. We show how a dynamic model can be used to simulate the effects of policy over time, for both environmental and economic variables.

Keywords: agriculture; commercial policy; environmental policy; international economic relations (search for similar items in EconPapers)
Date: 1995-03-01
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