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Market Integration and Competition in Environmental and Trade Policies

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  • Kenji Fujiwara

Abstract

Recent empirics suggest the relevance of transport cost reductions for world trade growth along with eliminations in protectionist trade barriers. To address the welfare effects of trade cost reductions in a context of `trade and the environment,' we develop a two-stage game model where governments choose environmental and trade policies and rms play a Cournot-Nash game. We show that reductions in transport costs lead to lower emission taxes and higher tariffs. And, we nd that the degree of pollution damage plays a central role in whether market integration is welfare-improving relative to autarky.
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  • Kenji Fujiwara, 2011. "Market Integration and Competition in Environmental and Trade Policies," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 49(4), pages 561-572, August.
    • Handle: RePEc:kap:enreec:v:49:y:2011:i:4:p:561-572
    DOI: 10.1007/s10640-010-9451-9
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    Cited by:

    1. Bo Li & Fei Xing & Mark Yu, 2018. "Upstream Pricing Schemes, Trade Liberalization, Trade and Environmental Policies of Downstream Countries," Sustainability, MDPI, vol. 10(7), pages 1-13, July.
    2. Ioanna Pantelaiou & Panos Hatzipanayotou & Panagiotis Konstantinou & Anastasios Xepapadeas, 2020. "Can Cleaner Environment Promote International Trade? Environmental Policies as Export Promoting Mechanisms," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 75(4), pages 809-833, April.

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    More about this item

    Keywords

    Market integration; Oligopoly; Pollution tax; Tariff; Gains/losses from trade; F12; F18; L13; Q56;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F18 - International Economics - - Trade - - - Trade and Environment
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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