Trade, Strategic Environmental Policy, and Global Pollution

Akihiko Yanase

    Research output: Contribution to journalArticle

    12 Citations (Scopus)

    Abstract

    This paper examines the effects of international trade in a model with global pollution that accumulates over time because of production emissions in each country. If countries cooperatively determine their environmental policies, autarky and free trade in the absence of trade costs generate the same optimal solution. By contrast, if environmental policies are determined noncooperatively, the effects of trade on global pollution and welfare are ambiguous because policy games can result in multiple equilibria. Although trade increases both the lower and upper bounds of the pollution stock, whether trade expands the range of possible steady-state pollution levels is ambiguous. The analysis then extends to consider trade costs.

    Original languageEnglish
    Pages (from-to)493-512
    Number of pages20
    JournalReview of International Economics
    Volume18
    Issue number3
    DOIs
    Publication statusPublished - 2010 Aug 1

    ASJC Scopus subject areas

    • Geography, Planning and Development
    • Development

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