Trade Structure, Transboundary Pollution and Multilateral Trade Liberalization: the Effects on Environmental Taxes and Welfare

Bruno Nkuiya ()

No 135987, Working Papers from University of Laval, Center for Research on the Economics of the Environment, Agri-food, Transports and Energy (CREATE)

Abstract: This paper considers a trade situation where the production activities of potentially heterogeneous countries generate pollution which can cross borders and harm the well-being of all the countries involved. In each of those countries the policy market levies pollution taxes on the polluting firms and a tariff on imports in order to correct that distortion. The purpose of the paper is to investigate the effect of a reduction in the tariff on equilibrium pollution taxes and welfare. The existing literature has investigated this problem for trade between two identical countries. This paper analyzes the problem in the more realistic context where countries are not necessarily identical and trade can be multilateral. It becomes possible to show what bias is introduced when those two realities are neglected. I find that a tariff reduction can actually lower output; it can also lower welfare even if pollution is purely local.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Date: 2012-10
New Economics Papers: this item is included in nep-env
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/135987/files/CREATE2012-8.pdf (application/pdf)

Related works:
Journal Article: Trade Structure, Transboundary Pollution and Multilateral Trade Liberalization: The Effects on Environmental Taxes and Welfare (2013)
Working Paper: Trade Structure, Transboundary Pollution and Multilateral Trade Liberalization: the Effects on Environmental Taxes and Welfare (2012)
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:ags:ulavwp:135987

DOI: 10.22004/ag.econ.135987

Access Statistics for this paper

More papers in Working Papers from University of Laval, Center for Research on the Economics of the Environment, Agri-food, Transports and Energy (CREATE) Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().