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Environmental Protection by One or Both Trading Partners in a Heckscher-Ohlin-Samuelson Model

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  • Robert Kohn

Abstract

In this Heckscher-Ohlin-Samuelson model, production of a pollutive good damages production of another good within the same country. Unilateral and bilateral shifts from laissez faire to Pigouvian policy are numerically simulated for cases of low emissions and a high volume of trade, high emissions and a high volume of trade, and finally, high emissions and a low volume of trade. A country can be worse off when it becomes Pigouvian and it can be worse off when its trading partner becomes Pigouvian. Nevertheless, a simple game theory version of the model suggests a “race to the top”, in which all countries become Pigouvian. Copyright Kluwer Academic Publishers 1998

Suggested Citation

  • 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.
    • Handle: RePEc:kap:openec:v:9:y:1998:i:4:p:327-342
    DOI: 10.1023/A:1008313414694
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    References listed on IDEAS

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    Cited by:

    1. Kohn, Robert E., 2003. "Environmental standards as barriers to trade," Socio-Economic Planning Sciences, Elsevier, vol. 37(3), pages 203-214, September.
    2. Kohn, Robert E., 2001. "Unilateral transfer of abatement capital," Resource and Energy Economics, Elsevier, vol. 23(2), pages 85-95, April.
    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.

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