International Trade and the Environment: Theoretical and Policy Linkages

J. Peter Neary

Environmental & Resource Economics, 2006, vol. 33, issue 1, 95-118

Abstract: I review and extend three approaches to trade and environmental policies: competitive general equilibrium, oligopoly and monopolistic competition. The first two have surprisingly similar implications: deviations from first-best rules are justified only by constraints on policy choice (which motivates what I call a “single dividend” approach to environmental policy), and taxes and emissions standards differ in ways which reflect the Le Chatelier principle. I also show how environmental taxes may lead to a catastrophic relocation of industry in the presence of agglomeration effects, although not necessarily if there is a continuum of industries which differ in pollution intensity. Copyright Springer 2006

Keywords: environmental policy; international trade policy; location and economic geography; pollution abatement; strategic trade policy; O13; L13; F12 (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (49)

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DOI: 10.1007/s10640-005-1707-4

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