TRADE AND THE ENVIRONMENT: ECONOMIC AND ENVIRONMENTAL IMPACTS OF GLOBAL DAIRY TRADE LIBERALISATION

Caroline Saunders and Selim Cagatay ()
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Caroline Saunders: Agribusiness and Economics Research Unit, Lincoln University, Canterbury, New Zealand
Selim Cagatay: Department of Economics, Hacettepe University, Turkey

Journal of Environmental Assessment Policy and Management (JEAPM), 2004, vol. 06, issue 03, 339-365

Abstract: This paper presents a partial equilibrium model of dairy sector international trade which has been extended to include physical dairy production systems and their effect on water quality. This combined model, LTEM (Lincoln Trade and Environment Model), is then used to simulate the effects of liberalisation policies on trade flows, dairy production systems and groundwater nitrate levels across different countries. The results show expected variation in price and production impacts, but also varying effects on groundwater quality between and within countries. More specifically, whilst liberalisation lowers dairy production in the EU and reduces the EU nitrate pollution slightly, the balancing production increases elsewhere lead to marginally higher pollution in other countries. This is of policy relevance given contemporary debates about the likely net environmental effect of further trade liberalisation.

Keywords: Trade liberalisation; partial equilibrium trade modelling; dairy production systems; groundwater nitrate concentration; JEL Classification F18; JEL Classification Q17; JEL Classification Q18 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (1)

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DOI: 10.1142/S1464333204001766

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