Trade liberalization and transboundary pollution

Lai, Yu‐Bong; Hu, Chia-Hsien

doi:10.1007/bf03353942

Cited by 8 publications

(13 citation statements)

References 17 publications

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“…The leakage problem has been discussed many times in earlier literature, albeit in contexts different from ours; see e.g.,Gurzgen and Rauscher 2000),Conconi (2003), andLai and Hu (2005),…”

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confidence: 98%

Optimal Taxation, Redistribution, and Environmental Externalities

Aronsson

Sjögren

2018

IRERE

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This paper surveys research on optimal redistributive taxation in economies with environmental externalities. A major question is whether externality correction only motivates an adjustment of the tax policy rule for the externality-generating activity, or whether the marginal value of the externality directly enters the policy rules for other tax instruments as well. In a static benchmark model with an atmospheric consumption externality, where the government uses a mix of a nonlinear income tax and linear commodity taxes, we show that Sandmo's (1975) additivity property applies. This means that externality correction leads to an additional term (measuring the marginal value of the externality) in the commodity tax formula for the externality generating good, while the policy rules for commodity taxation of clean goods and marginal income taxation take the same form as in the absence of any externality. We also extend this benchmark model to capture a number of scenarios (such as non-atmospheric externalities, border trade in the externality generating good, and competition between governments in a multi-country framework), where the additivity property no longer applies. We end by examining an intertemporal model of optimal taxation with a stock-externality, allowing us to integrate the study of optimal redistributive taxation with literature on environmental economics and policy based on dynamic models.

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“…The leakage problem has been discussed many times in earlier literature, albeit in contexts different from ours; see e.g.,Gurzgen and Rauscher 2000),Conconi (2003), andLai and Hu (2005),…”

mentioning

confidence: 98%

Optimal Taxation, Redistribution, and Environmental Externalities

Aronsson

Sjögren

2018

IRERE

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“…Some studies address both environmental taxes, which are endogenously decided, and tariffs, which are exogenously given, from the perspective of international trade. Lai and Hu (2005) investigate the effects of trade liberalization considering trans-boundary pollution. They argue that trade liberalization enhances global welfare if trans-boundary pollution is sufficiently strong.…”

Section: Introductionmentioning

confidence: 99%

Environmental Tax and Tariffs Under the International Trade of Products

Kawasaki

Ohno

2014

Rev Urban & Reg Develop

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Cross‐border consumption has become more popular, prompting a growing interest in the problems related to international trade. At the same time, trans‐boundary air pollution has become a major environmental problem, meriting increased attention in environmental economics literature. This study considers these problems in the context of environmental taxes and tariffs (or customs duties on imports), assuming quadratic environmental damage. We compare the environmental tax rate with and without a tariff and demonstrate that the former is lower than the latter. We then compare the level of social welfare with and without a tariff and demonstrate that when the degree of trans‐boundary air pollution is low (high), welfare without the tariff is higher (lower) than with it. Thus, a tariff is not always necessary from the viewpoint of social welfare.

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“…I derive both cooperative and noncooperative solutions for the dynamic policy problem. If the governments cooperate on their national environmental policies, each optimal solution under autarky and trade is characterized as a unique and stable 2) Using static trade models, a number of studies discuss international trade and transboundary or global pollution with the endogenous determination of environmental policies (Copeland and Taylor, 1995;2005;Lai and Hu, 2005;Ludema and Wooton, 1994;Tanguay, 2001).…”

Section: Introductionmentioning

confidence: 99%

Global Pollution, Dynamic and Strategic Policy Interactions, and Long-run Effects of Trade

Yanase

2009

The International Economy

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This paper examines the effects of international trade in a model with global pollution that accumulates over time because of production emissions in each country. If countries cooperatively determine the national environmental policies, the long-run stock of global pollution under trade may or may not be higher than that under autarky, depending on abatement technologies and trade costs. If environmental policies are determined noncooperatively, there may be multiple equilibria. This means that the long-run effect of trade on the global environment may be indeterminate because it depends on, in addition to trade costs and abatement technologies, the actually implemented policy. The welfare consequences of trade are also discussed.

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Trade liberalization and transboundary pollution

Cited by 8 publications

References 17 publications

Optimal Taxation, Redistribution, and Environmental Externalities

Optimal Taxation, Redistribution, and Environmental Externalities

Environmental Tax and Tariffs Under the International Trade of Products

Global Pollution, Dynamic and Strategic Policy Interactions, and Long-run Effects of Trade

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