Market Integration and Competition in Environmental and Trade Policies

Kenji Fujiwara ()

No 63, Discussion Paper Series from School of Economics, Kwansei Gakuin University

Abstract: Recent empirics suggest the relevance of transport cost reductions for world trade growth along with eliminations in protectionist trade barriers. To address the welfare effects of trade cost reductions in a context of `trade and the environment,' we develop a two-stage game model where governments choose environmental and trade policies and rms play a Cournot-Nash game. We show that reductions in transport costs lead to lower emission taxes and higher tariffs. And, we nd that the degree of pollution damage plays a central role in whether market integration is welfare-improving relative to autarky.

Keywords: market integration; oligopoly; pollution tax; tariff; gains/losses from trade (search for similar items in EconPapers)
JEL-codes: F12 F18 L13 Q56 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2010-11, Revised 2010-11
New Economics Papers: this item is included in nep-env
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http://192.218.163.163/RePEc/pdf/kgdp63.pdf First version, 2010 (application/pdf)

Related works:
Journal Article: Market Integration and Competition in Environmental and Trade Policies (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:kgu:wpaper:63

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