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Global Pollution: A Heckscher-Ohlin-Samuelson Model of Pigouvian Taxation

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  • Robert E. Kohn

    (Southern Illinois University)

Abstract

It could be inferred from the externality literature that, in the absence of lump sum transfers between countries, global Pigouvian taxation would make pollution-intensive countries worse-off. This paper uses the "strong version" of the Heckscher-Ohlin-Samuelson model to demonstrate that a uniform Pigouvian tax shifts the terms-of-trade in favor of the polluting good so that on balance a more polluting country could be better-off and a less polluting country worse-off. This result is consistent with some empirical observations on environmental policy in industrialized countries as compared with that in newly developing countries.

Suggested Citation

  • Robert E. Kohn, 1991. "Global Pollution: A Heckscher-Ohlin-Samuelson Model of Pigouvian Taxation," Eastern Economic Journal, Eastern Economic Association, vol. 17(3), pages 337-343, Jul-Sep.
    • Handle: RePEc:eej:eeconj:v:17:y:1991:i:3:p:337-343
    as

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    File URL: http://web.holycross.edu/RePEc/eej/Archive/Volume17/V17N3P337_343.pdf
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    References listed on IDEAS

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    1. repec:bla:ecorec:v:55:y:1979:i:151:p:359-67 is not listed on IDEAS
    2. Robert Dorfman, 1988. "The Political Economy of Environmental Protection: A Conversation," Eastern Economic Journal, Eastern Economic Association, vol. 14(3), pages 205-209, Jul-Sep.
    3. Kazumi Asako, 1979. "Environmental Pollution in an Open Economy," The Economic Record, The Economic Society of Australia, vol. 55(4), pages 359-367, December.
    4. McGuire, Martin C., 1982. "Regulation, factor rewards, and international trade," Journal of Public Economics, Elsevier, vol. 17(3), pages 335-354, April.
    5. James R. MARKUSEN, 2021. "International Externalities And Optimal Tax Structures," World Scientific Book Chapters, in: BROADENING TRADE THEORY Incorporating Market Realities into Traditional Models, chapter 16, pages 341-355, World Scientific Publishing Co. Pte. Ltd..
    6. Baumol,William J. & Oates,Wallace E., 1988. "The Theory of Environmental Policy," Cambridge Books, Cambridge University Press, number 9780521322249, November.
    7. Merrifield, John D., 1988. "The impact of selected abatement strategies on transnational pollution, the terms of trade, and factor rewards: A general equilibrium approach," Journal of Environmental Economics and Management, Elsevier, vol. 15(3), pages 259-284, September.
    8. repec:bla:kyklos:v:37:y:1984:i:4:p:638-59 is not listed on IDEAS
    9. Pethig, Rudiger, 1976. "Pollution, welfare, and environmental policy in the theory of Comparative Advantage," Journal of Environmental Economics and Management, Elsevier, vol. 2(3), pages 160-169, February.
    10. Hahn, Robert W, 1989. "Economic Prescriptions for Environmental Problems: How the Patient Followed the Doctor's Orders," Journal of Economic Perspectives, American Economic Association, vol. 3(2), pages 95-114, Spring.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Kohn, Robert E., 1995. "Exporting toxic waste," Socio-Economic Planning Sciences, Elsevier, vol. 29(3), pages 187-195, September.
    2. Robert Kohn, 1995. "Salvatore model with equiproportional preservation of forests," Open Economies Review, Springer, vol. 6(1), pages 63-79, January.
    3. Kohn, Robert E., 2000. "The effect of environmental taxes on the volume of international trade," Ecological Economics, Elsevier, vol. 34(1), pages 77-87, July.
    4. Robert E. Kohn & Paul E. Chambers, 2000. "Pollution Abatement and International Self-Sufficiency," Eastern Economic Journal, Eastern Economic Association, vol. 26(2), pages 213-219, Spring.
    5. Haixiao Huang, Walter C. Labys, 2002. "Environment and trade: a review of issues and methods," International Journal of Global Environmental Issues, Inderscience Enterprises Ltd, vol. 2(1/2), pages 100-160.
    6. Robert Kohn, 1998. "Environmental Protection by One or Both Trading Partners in a Heckscher-Ohlin-Samuelson Model," Open Economies Review, Springer, vol. 9(4), pages 327-342, October.

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    More about this item

    Keywords

    Externality; Heckscher Ohlin; Lump Sum Transfer; Pigouvian Tax; Polluting; Pollution; Tax; Taxation; Terms of Trade; Trade;
    All these keywords.

    JEL classification:

    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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