A Quantitative Analysis of the Environmental Impact Induced by Free Trade between Korea and Japan

Sang In Kang and Jae Joon Kim

No 331247, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: This study analyzed the air pollution impact in Korea induced by trade liberalization between Korea and Japan. A standard multi-region CGE model based on GTAP data base Ver. 5.0 and Korean air pollution inventories in 1998 were used to give a quantitative feature of trade and environment linkage in Korea. The simulation result shows that the aggregated environmental effect depends on the change of specialization structure between pre and post trade liberalization. The interindustrial difference of emission coefficients and of disposal cost by air pollutants plays a major role in determining the scale of the aggregated environmental effect. The free trade agreement between Korea and Japan reduces the overall air pollution emission by 0.36% but increases the pollution disposal cost slightly by 0.06%. The rate of disposal cost increase is much smaller than that of the real GDP(0.28%). This type of quantitative analysis can provide useful environmental policy guidelines for pursuing "win-win strategy" in trade and environment linkage.

Keywords: Environmental Economics and Policy; International Relations/Trade (search for similar items in EconPapers)
Pages: 29
Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:331247

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