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Economic Growth, Environmental Issues and Trade

Author

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  • Anderson, Kym

Abstract

This paper explores the implications for trade relations of the greening of world politics. It modifies the standard theory of changing comparative advantages in a growing world economy to show the effects on trade of taking into account the fact that the demand for domestic environmental policies increases as economies expand. The demands for environmental policies would not be a problem if they were confined to first-best policies. Trade problems arise, however, when those policies undermine an industry's competitiveness (from which protection is sought), or when a trade policy measure is adopted in an attempt to impose one's own standards on another country's environment, or when trade liberalization is opposed by environmentalists. The paper shows how all three unnecessarily threaten to undermine the global trading system and how, in the cases of coal and food, trade liberalization could well improve rather than worsen the global environment.

Suggested Citation

  • Anderson, Kym, 1993. "Economic Growth, Environmental Issues and Trade," CEPR Discussion Papers 830, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:830
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    Citations

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    Cited by:

    1. Karp, Larry & Sacheti, Sandeep & Zhao, Jinhua, 2001. "Common Ground between Free-Traders and Environmentalists," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(3), pages 617-647, August.
    2. Mehmet, Ozay, 1995. "Employment creation and green development strategy," Ecological Economics, Elsevier, vol. 15(1), pages 11-19, October.
    3. Bommer, Rolf & Schulze, Günther G., 1994. "Economic integration and environmental policy: Does NAFTA increase pollution?," Discussion Papers, Series II 218, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    4. Kym Anderson, 1997. "Social Policy Dimensions of Economic Integration: Environmental and Labor Standards," NBER Chapters, in: Regionalism versus Multilateral Trade Arrangements, pages 57-90, National Bureau of Economic Research, Inc.
    5. Chinn, Menzie, 1995. "Asia Pacific regionalism: Readings in international economic relations : Ross Garnaut and Peter Drysdale. HarperEducational in association with The Australia-Japan Research Centre, Canberra 1994, 433p," Journal of Asian Economics, Elsevier, vol. 6(4), pages 595-599.
    6. van Veen-Groot, Danielle B. & Nijkamp, Peter, 1999. "Globalisation, transport and the environment: new perspectives for ecological economics," Ecological Economics, Elsevier, vol. 31(3), pages 331-346, December.
    7. Bommer, Rolf & Schulze, Gunther G., 1999. "Environmental improvement with trade liberalization," European Journal of Political Economy, Elsevier, vol. 15(4), pages 639-661, November.

    More about this item

    Keywords

    Comparative Advantage; Environment; Global Trading System; Trade Relations;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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