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Transboundary Movements of Waste

Sophie Bernard ()

No 1006E, Working Papers from University of Ottawa, Department of Economics

Abstract: In a stylized model of international trade, a monopolist in the North exports second-hand products to a representative firm in the South to be reused as intermediate goods, with potential trade gains. The degree of reusability of waste products is a crucial choice variable in the North. This is because with a lack of international vigilance, non-reusable waste can be mixed illegally with the reusable waste. I explore the driving forces for the movement of illegal waste, paying particular attention to the role of local waste regulations, such as the EU's Waste Electrical and Electronic Equipment directive. Under mild conditions, it is shown that increased regulation stringency in the North leads its firm to reduce the degree of reusability of its products. As a result, the flow of non-reusable waste to the South increases, providing another channel for the Pollution Haven Hypothesis.

Keywords: second-hand products; illegal waste; environmental regulation; trade (search for similar items in EconPapers)
JEL-codes: F18 L10 O20 Q53 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2010
New Economics Papers: this item is included in nep-cwa, nep-env, nep-reg and nep-res
References: Add references at CitEc
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