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Can R&D-Inducing Green Tariffs Replace International Environmental Regulations?

Author

Listed:
  • Alireza Naghavi

    (University of Modena)

Abstract

This paper investigates the link between trade and environment by exploring the effects of green tariffs on the location of firms, innovation and the environment. It shows that tariffs levied on polluting goods could result in less global pollution than harmonization of environmental standards by inducing more pollution abatement R&D, generating lower unit emissions from production, and reducing competition. Green tariffs reduce pollution by (1) shifting production to the region where environmental standards are respected, (2) strategically inducing abatement R&D by the Northern firm by granting the latter a higher market share, (3) creating abatement R&D by deterring delocation.

Suggested Citation

  • Alireza Naghavi, 2006. "Can R&D-Inducing Green Tariffs Replace International Environmental Regulations?," Working Papers 2006.92, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2006.92
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    References listed on IDEAS

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    7. Javorcik Beata Smarzynska & Wei Shang-Jin, 2003. "Pollution Havens and Foreign Direct Investment: Dirty Secret or Popular Myth?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(2), pages 1-34, December.
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    Cited by:

    1. Weiguang Chen & Qing Guo, 2017. "Assessing the Effect of Carbon Tariffs on International Trade and Emission Reduction of China’s Industrial Products under the Background of Global Climate Governance," Sustainability, MDPI, vol. 9(6), pages 1-17, June.

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    More about this item

    Keywords

    Environmental Standards; Multinationals; Location of Firms; Pollution Abatement R&D; Green Tariffs;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F18 - International Economics - - Trade - - - Trade and Environment
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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