Market integration, environmental policy, and transboundry pollution from consumption

Kenji Fujiwara ()

No 62, Discussion Paper Series from School of Economics, Kwansei Gakuin University

Abstract: Recent empirics report that transport cost reductions signi cantly contribute to rapidly growing world trade. This paper develops a reciprocal market model of intra-industry trade with transboundary pollution from consumption to consider how market integration in the form of transport cost reductions a ects the noncooperative choice of an environmental policy and the equilibrium welfare. I show that market integration can improve welfare locally, but that welfare under any non-prohibitive trade cost can not be higher than welfare under autarky. This possibility of trade losses exhibits a sharp contrast to the case of production-generated pollution.

Keywords: transboundary pollution, consumption-generated pollution, gains from trade; environmental policy (search for similar items in EconPapers)
Pages: 18 pages
Date: 2010-11, Revised 2010-11
New Economics Papers: this item is included in nep-ene and nep-env
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http://192.218.163.163/RePEc/pdf/kgdp62.pdf First version, 2010 (application/pdf)

Related works:
Journal Article: Market integration, environmental policy, and transboundry pollution from consumption (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:kgu:wpaper:62

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