The Environment and International Trade

Chien-Fu Chou, Jolyne Melmed-Sanjak and Oz Shy

No 275515, Foerder Institute for Economic Research Working Papers from Tel-Aviv University > Foerder Institute for Economic Research

Abstract: The relationship between international trade and environmental degradation is analyzed in this short paper. Environmental attributes are modeled as differentiated, non-tradeable goods. The results derived from the model indicate that when consumers view consumption goods and environmental attributes as substitutes and if consumers place a relatively higher value on environmental variety than on commodity variety, the opening of trade may reduce the welfare of the trading countries. A net welfare loss may occur as exchange gains from trade are reduced or eliminated by environmental losses.

Keywords: Environmental Economics and Policy; Financial Economics; International Relations/Trade (search for similar items in EconPapers)
Pages: 21
Date: 1991-04
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:isfiwp:275515

DOI: 10.22004/ag.econ.275515

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