Environmental degradation and comparative advantage reversal

Angelo Antoci, Giulio Galdi and Paolo Russu

Socio-Economic Planning Sciences, 2022, vol. 82, issue PA

Abstract: With the climate rapidly changing and a substantial part of the economy relying on the environment for its productivity, can current competitive advantages and trade patterns be assumed to stay the same in the future? In order to tackle this question, we propose a Comparative Advantage model in which productivity of countries is assumed to be negatively affected by environmental degradation, with larger impacts on the productivity of developing countries. We show that comparative advantages may invert if the environment is sufficiently degraded, leading to a reversal in product specialisation of countries that might make some agents worse off in an open economy.

Keywords: Climate change; Comparative advantage; Environmental degradation; Evolutionary dynamics; International trade (search for similar items in EconPapers)
JEL-codes: D62 O13 P45 Q27 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceps:v:82:y:2022:i:pa:s0038012122000131

DOI: 10.1016/j.seps.2022.101235

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