Tariff and environmental policies with product standards

Chi-Chur Chao, Jean-Pierre Laffargue and Pasquale Sgro ()

Canadian Journal of Economics, 2012, vol. 45, issue 3, 978-995

Abstract: For a small open economy with consumption-based pollution emissions, the first-best optimal policy prescription is free trade along with a Pigouvian tax on emissions. Therefore, a package of coordinated tax reform by replacing tariffs with emission taxes can lower pollution emissions and increase market access and hence improve residents' welfare and government revenue, as long as the initial tariffs are relatively high. Numerical simulations confirm the results obtained.

JEL-codes: F11 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (8)

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