A NOTE ON THE EFFECT OF TRADE LIBERALIZATION VIA OPTIMAL POLLUTION TAX

Takumi Haibara

Review of Urban & Regional Development Studies, 2008, vol. 20, issue 2, 123-134

Abstract: This paper reexamines the environmental consequences of trade liberalization in a general equilibrium model of a small open economy facing trade and environmental distortions. I show that, under certain conditions, trade liberalization achieved by reducing trade barriers increases the amount of pollution through change in the optimal pollution tax. This result is worthy of consideration in regard to countries that pursue trade liberalization, and the subsequent environmental cleanup.

Date: 2008
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https://doi.org/10.1111/j.1467-940X.2008.00145.x

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Persistent link: https://EconPapers.repec.org/RePEc:bla:revurb:v:20:y:2008:i:2:p:123-134

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