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Piecemeal Reform of Trade and Environmental Policy When Consumption Also Pollutes

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  • Metcalfe, Mark R.
  • Beghin, John C

Abstract

We incorporate endogenous (price-responsive) consumption pollution into a dual trade model to assess welfare effects of coordinated trade and environmental piecemeal reform in a small, open and distorted economy. Pollution is generated by production and consumption. Producers control the level of pollution and face incentives to abate both types of pollution. We identify sufficient conditions for welfare-improving reforms of trade and environmental policies. An additional domestic environmental policy instrument must be imposed on exportables because of their supply response to foreign environmental taxes.

Suggested Citation

  • Metcalfe, Mark R. & Beghin, John C, 2015. "Piecemeal Reform of Trade and Environmental Policy When Consumption Also Pollutes," ISU General Staff Papers 201501010800001054, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:201501010800001054
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    References listed on IDEAS

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    1. Jota Ishikawa & Toshihiro Okubo, 2010. "Environmental and Trade Policies for Oligopolistic Industry in the Presence of Consumption Externalities," Discussion Paper Series DP2010-28, Research Institute for Economics & Business Administration, Kobe University.
    2. repec:ebl:ecbull:v:17:y:2007:i:9:p:1-9 is not listed on IDEAS
    3. Fukushima, Takashi, 1979. "Tariff Structure, Nontraded Goods and Theory of Piecemeal Policy Recommendations," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 20(2), pages 427-435, June.
    4. Mark R Metcalfe & John C Beghin, 2015. "Piecemeal Reform of Trade and Environmental Policy When Consumption Also Pollutes," Economics Bulletin, AccessEcon, vol. 35(4), pages 2282-2287.
    5. Copeland Brian R., 1994. "International Trade and the Environment: Policy Reform in a Polluted Small Open Economy," Journal of Environmental Economics and Management, Elsevier, vol. 26(1), pages 44-65, January.
    6. John Beghin & David Roland-Holst & Dominique van der Mensbrugghe, 1997. "Trade and Pollution Linkages: Piecemeal Reform and Optimal Intervention," Canadian Journal of Economics, Canadian Economics Association, vol. 30(2), pages 442-455, May.
    7. Arja H. Turunen‐Red & Alan D. Woodland, 2004. "Multilateral Reforms of Trade and Environmental Policy," Review of International Economics, Wiley Blackwell, vol. 12(3), pages 321-336, August.
    8. Dean, Judith M., 1992. "Trade and the environment : a survey of the literature," Policy Research Working Paper Series 966, The World Bank.
    9. Leonard F.S. Wang & Tai-Liang Chen & Ya-Chin Wang, 2007. "Trade liberalization and environmental tax in differentiated oligopoly with consumption externalities," Economics Bulletin, AccessEcon, vol. 17(9), pages 1-9.
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    Cited by:

    1. Mark R Metcalfe & John C Beghin, 2015. "Piecemeal Reform of Trade and Environmental Policy When Consumption Also Pollutes," Economics Bulletin, AccessEcon, vol. 35(4), pages 2282-2287.
    2. Leonard F.S. Wang & Tai-Liang Chen & Ya-Chin Wang, 2007. "Trade liberalization and environmental tax in differentiated oligopoly with consumption externalities," Economics Bulletin, AccessEcon, vol. 17(9), pages 1-9.
    3. Takumi Haibara, 2023. "Three tax reforms with and without public pollution abatement," Economics Bulletin, AccessEcon, vol. 43(1), pages 574-582.
    4. Park, Dooho & Seidl, Andrew & Davies, Stephen, 2002. "Environmental Policy and Industry Location: The Case of the U.S. Livestock Industry," The Review of Regional Studies, Southern Regional Science Association, vol. 32(2), pages 293-307, Summer/Fa.
    5. Park, Dooho & Davies, Stephen P. & Seidl, Andrew F., 2001. "A Nationwide, State-Level, Analysis Of Animal Confinement Policy By Selected Species," 2001 Annual Meeting, July 8-11, 2001, Logan, Utah 36160, Western Agricultural Economics Association.
    6. Park, Dooho & Seidl, Andrew F. & Davies, Stephen P. & Frasier, W. Marshall, 2000. "Environmental Policy Influences On Livestock Stocking And Location Decisions," 2000 Annual Meeting, June 29-July 1, 2000, Vancouver, British Columbia 36340, Western Agricultural Economics Association.

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    More about this item

    JEL classification:

    • F1 - International Economics - - Trade
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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