Trade Liberalisation, Transboundary Pollution and Market Size

Rikard Forslid, Toshihiro Okubo and Mark Sanctuary

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: This paper uses a monopolistic competitive framework with many sectors to study the impact of trade liberalization on local and global emissions. We focus on the interplay of the pollution haven effect and the home market effect and show how a large-market advantage can counterbalance a high emission tax, implying that trade liberalization leads to lower global emissions. Generally, our results suggest that relative market size, the level of trade costs, the ease of abatement, and the degree of product differentiation are relevant variables for empirical studies on trade and pollution.

Pages: 22 pages
Date: 2015-04
New Economics Papers: this item is included in nep-ene, nep-env and nep-mst
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Citations: View citations in EconPapers (2)

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https://www.rieti.go.jp/jp/publications/dp/15e041.pdf (application/pdf)

Related works:
Journal Article: Trade Liberalization, Transboundary Pollution, and Market Size (2017)
Working Paper: Trade Liberalization, Transboundary Pollution and Market Size (2017)
Working Paper: Trade Liberalization, Transboundary Pollution and Market Size (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:15041

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