North–South Trade and Heterogeneous Damages from Local and Global Pollution

Hélène Ollivier

Environmental & Resource Economics, 2016, vol. 65, issue 2, No 2, 337-355

Abstract: Abstract This paper examines how income-induced environmental policy differences and damage heterogeneity interact to determine the comparative advantage in a polluting activity. In a non-cooperative framework, North and South regulate two types of pollution, local pollution (e.g., air and water pollution) and global pollution (e.g., greenhouse gas emissions), each of which induces heterogeneous damages for consumers. I find that (1) North or South can have the comparative advantage in the dirty sector; (2) whatever the region with this comparative advantage, the worldwide level of global pollution can either increase or decrease with trade; (3) local and global emissions evolve symmetrically in each region with trade, even though pollution regulations may be asymmetric.

Keywords: Multiple pollutants; Heterogeneous damages; International trade (search for similar items in EconPapers)
JEL-codes: F18 H23 Q56 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (9)

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Working Paper: North–South Trade and Heterogeneous Damages from Local and Global Pollution (2016)
Working Paper: North–South Trade and Heterogeneous Damages from Local and Global Pollution (2016)
Working Paper: North–South Trade and Heterogeneous Damages from Local and Global Pollution (2016)
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DOI: 10.1007/s10640-015-9902-4

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