Chapter

The Environment and Trade Policy

W. Max Corden

in Trade Policy and Economic Welfare

Second edition

Published in print February 1997 | ISBN: 9780198775348
Published online November 2003 | e-ISBN: 9780191715471 | DOI: http://dx.doi.org/10.1093/0198775342.003.0013
 The Environment and Trade Policy

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Trade policy may affect the environment in various ways, but in all cases, the best policy is to apply taxes directly at the point of the external diseconomy. The analysis of Ch. 2 of this book is applied here. The effects of a tax or anti‐pollution regulation applied in one country on the terms of trade, on competitiveness, and on pollution in another country are analysed. In addition, there are transborder externalities and global public goods, which can be categorized in various ways. Arguments for and against the use of trade policy to deal with these externalities are given.

Keywords: environment; external diseconomy; externalities; pollution; public goods; taxation; trade policy

Chapter.  9819 words.  Illustrated.

Subjects: International Economics

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