Liberalizing trade in environmental goods and services

Dijkstra, Bouwe and Mathew, Anuj (2015) Liberalizing trade in environmental goods and services. Environmental Economics and Policy Studies . ISSN 1432-847X

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We examine the effects of trade liberalization in environmental goods in a model with one domestic downstream polluting firm and two upstream firms (one domestic, one foreign). The upstream firms offer their technologies to the downstream firm at a flat fee. The domestic government sets the emission tax rate after the outcome of R&D is known. The effect of liberalization on the domestic upstream firm's R&D incentive is ambiguous. Liberalization usually results in cleaner production, which allows the country to reach higher welfare. However this increase in welfare is typically achieved at the expense of the environment (a backfire effect).

Item Type: Article
Schools/Departments: University of Nottingham, UK > Faculty of Social Sciences > School of Economics
Identification Number:
Depositing User: Dijkstra, Bouwe
Date Deposited: 22 Jan 2016 14:37
Last Modified: 04 May 2020 17:14

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