How Should Developing Countries Cope with Pollution-Migration? An Extended Model of North-South Trade and its Numerical Simulation

Malin Song and Shuhong Wang

Energy & Environment, 2013, vol. 24, issue 6, 939-951

Abstract: In recent years, with rapidly growing world trade and increasingly stricter environmental controls in developed countries, some enterprises have transferred heavily polluting plants to developing countries where environmental controls are more relaxed. This kind of pollution-“migration†is therefore threatening the environment of some developing or rather “emerging†countries. How to achieve a balance between economic development and environmental protection has already become an important issue that needs to be handled appropriately by developing countries when actively engaging in industrial migration. This paper extends the North-South trade model by introducing environmental pollution taxation to make an in-depth analysis. The calculation of the model leads to the conclusion that motivation of polluting companies in developed countries decreases when transferring to developing countries with a rising environmental pollution tax. Through numerical simulation, this paper finds the minimum environmental pollution tax rate that is likely to prevent industrial migration. When the tax is lower than this, pollution migration would not be stop; and if the tax is too high, it will hurt the economic development of developing countries. Hence, the minimum environmental pollution tax is the optimal tax rate for balanced development.

Keywords: North-South trade; pollution migration; environmental pollution taxation; numerical simulation (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1260/0958-305X.24.6.939 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:engenv:v:24:y:2013:i:6:p:939-951

DOI: 10.1260/0958-305X.24.6.939

Access Statistics for this article

More articles in Energy & Environment
Bibliographic data for series maintained by SAGE Publications ().