Renewable Resources, Pollution and Trade in a Small Open Economy

Horatiu Rus

No 2006.140, Working Papers from Fondazione Eni Enrico Mattei

Abstract: Industrial pollution can have damaging effects on resource-based productive sectors. International trade creates opportunities for overexploitation of the open-access renewable resources but also for separating the sectors spatially. The paper shows that, depending on the relative damage inflicted by the two industries on the environment, it is possible that the production externality will persist and that specialization in the dirty good may not be the obvious choice from a welfare perspective. Also, the resource exporter does not necessarily have to lose from trade even when specializing incompletely, due to the partially offsetting external effects.

Keywords: Renewable Resources; Pollution; Production Externalities; Environment; International Trade (search for similar items in EconPapers)
JEL-codes: Q22 Q27 Q53 (search for similar items in EconPapers)
Date: 2006-11
New Economics Papers: this item is included in nep-agr, nep-env, nep-int and nep-res
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Working Paper: Renewable Resources, Pollution and Trade in a Small Open Economy (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2006.140

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