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Trade Policy and Environmental Regulation in the Asia–Pacific: A Simulation

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  • Olaf Unteroberdoerster

Abstract

The Asia–Pacific Economic Cooperation (APEC) has the potential to become the world's largest free trade area, encompassing both developed and developing countries. At the same time environmental standards vary substantially in the region. A multilateral computable general equilibrium (CGE) model combined with environmental sub–models simulates the environmental effects of trade and environmental policy changes. The simulations show: (i) Even drastic reductions in trade barriers have only a small effect on pollution; (ii) Low environmental standards relative to trade partners do not necessarily result in increased pollution when trade is liberalised; (iii) Unilaterally raising environmental standards does not crowd out pollution to countries with laxer standards.

Suggested Citation

  • Olaf Unteroberdoerster, 2003. "Trade Policy and Environmental Regulation in the Asia–Pacific: A Simulation," The World Economy, Wiley Blackwell, vol. 26(1), pages 73-95, January.
    • Handle: RePEc:bla:worlde:v:26:y:2003:i:1:p:73-95
    DOI: 10.1111/1467-9701.00511
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