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Trade reform and environmental externalities in general equilibrium: analysis for an archetype poor tropical country

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  • LÓPEZ, RAMÓN

Abstract

This paper provides a conceptual and empirical general equilibrium framework for the analysis of the impact of trade reform on welfare and the environment. The analysis is applied to Côte d'Ivoire explicitly considering externalities affecting biomass (natural vegetation), which is shown to be an important factor determining agricultural productivity.The simulation general equilibrium analysis shows that the agricultural output composition effect dominates the agricultural expansion effect for the case of complete trade liberalization. Thus, in this case trade liberalization causes a significant improvement in the rural biomass stock by cutting land area cultivated, increases agricultural productivity, and induces dramatic welfare gains. That is, trade liberalization is a win–win type of policy in this case. However, partial trade liberalization that only reduces protection to non-agricultural goods (and does not reduce tariffs to agricultural import substitutes and does not reduce export taxes) causes a further deterioration of the biomass resources and reduces welfare.

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  • López, Ramón, 2000. "Trade reform and environmental externalities in general equilibrium: analysis for an archetype poor tropical country," Environment and Development Economics, Cambridge University Press, vol. 5(4), pages 377-404, October.
    • Handle: RePEc:cup:endeec:v:5:y:2000:i:04:p:377-404_00
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    Cited by:

    1. Wurtenberger, Laura & Koellner, Thomas & Binder, Claudia R., 2006. "Virtual land use and agricultural trade: Estimating environmental and socio-economic impacts," Ecological Economics, Elsevier, vol. 57(4), pages 679-697, June.
    2. Anriquez, Gustavo, 2002. "Trade And The Environment: An Economic Literature Survey," Working Papers 28598, University of Maryland, Department of Agricultural and Resource Economics.
    3. Gregmar Galinato & Suzette Galinato, 2013. "The Role of Government Spending on Deforestation and Carbon Dioxide Emissions from Land Use Change," Working Papers 2013-14, School of Economic Sciences, Washington State University.
    4. Bardhan, Pranab, 2006. "Globalization and rural poverty," World Development, Elsevier, vol. 34(8), pages 1393-1404, August.
    5. Lopez, Ramon, 2003. "The Policy Roots of Socioeconomic Stagnation and Environmental Implosion: Latin America 1950-2000," World Development, Elsevier, vol. 31(2), pages 259-280, February.
    6. LeClair, Mark S. & Franceschi, Dina, 2006. "Externalities in international trade: The case for differential tariffs," Ecological Economics, Elsevier, vol. 58(3), pages 462-472, June.
    7. Pranab Bardhan, 2006. "Globalization, Inequality, and Poverty," IDB Publications (Working Papers) 9126, Inter-American Development Bank.
    8. Bentry Mkwara & Dan Marsh, 2009. "The Links between Poverty and the Environment in Malawi," Working Papers in Economics 09/10, University of Waikato.
    9. Galinato, Gregmar I. & Galinato, Suzette P., 2016. "The effects of government spending on deforestation due to agricultural land expansion and CO2 related emissions," Ecological Economics, Elsevier, vol. 122(C), pages 43-53.
    10. Toman, Michael, 2003. "The Roles of the Environment and Natural Resources in Economic Growth Analysis," RFF Working Paper Series dp-02-71, Resources for the Future.
    11. Galinato, Gregmar I. & Galinato, Suzette P., 2013. "The short-run and long-run effects of corruption control and political stability on forest cover," Ecological Economics, Elsevier, vol. 89(C), pages 153-161.
    12. Toma, Luiza & Ashworth, Cheryl J. & Stott, Alistair W., 2008. "A Partial Equilibrium Model Of The Linkages Between Animal Welfare, Trade And The Environment In Scotland," 109th Seminar, November 20-21, 2008, Viterbo, Italy 44825, European Association of Agricultural Economists.
    13. Gregmar Galinato & Suzette Galinato, 2010. "The Effects of Corruption Control and Political Stability on the Environmental Kuznets Curve of Deforestation-Induced Carbon Dioxide Emissions," Working Papers 2010-9, School of Economic Sciences, Washington State University.

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