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The Political Economy of Strategic Environmental Policy When Waste Products are Tradable

Thomas Kuhn and James Cassing ()

No 770, Econometric Society 2004 Far Eastern Meetings from Econometric Society

Abstract: In this paper we explore the implications of the possibility of “trade in trash†on optimal environmental policy and on the ramifications of a stronger or weaker environmental lobby across regions or nations. We have constructed a multiple stage game composed of a market stage and a policy stage. Waste might be exported to some less developed countries to get rid of any damages linked to waste treatment and disposal. Waste markets are imperfect where waste exporters exploit market power. We find that environmentalists do not necessarily succeed in pushing stricter environmental policy nor do industrialists in pushing weaker due to the fact that lobbying may be offset by terms of trade effects. As it happens, even stronger environmental sentiment in all nations need not lead to increased protection of the environment globally

Keywords: Trade and The Environment; Strategic Environmental Policy; International Trade in Waste Products; Lobbying (search for similar items in EconPapers)
JEL-codes: F1 H2 L1 Q2 (search for similar items in EconPapers)
Date: 2004-08-11
New Economics Papers: this item is included in nep-pol
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