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Coordinating Environmental and Trade Policy to Protect the Environment: A Pedagogical Approach

Patrik T. Hultberg and Darshana Udayanganie

Applied Economics Teaching Resources (AETR), 2022, vol. 4, issue 4

Abstract: Establishing appropriate environmental and trade policies is an important issue in today’s globalized economy, and yet there is no comprehensive analysis in most environmental economics and international trade undergraduate textbooks of how such policies are interrelated. The purpose of this article is to provide a straightforward framework for teaching students how environmental and trade policies are indeed interconnected, utilizing the standard tools of intermediate microeconomics. Focusing on a single competitive market and (nonstrategic) welfare maximizing government, optimal environmental and trade policies are derived and explored. The framework is used to address several circumstances, including negative production and consumption externalities, small and large countries, and transboundary pollution.

Keywords: Teaching/Communication/Extension/Profession (search for similar items in EconPapers)
Date: 2022
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DOI: 10.22004/ag.econ.324806

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