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Low tariff on dirty goods—Environmental negligence or environmental concern?

Marjit, Sugata; Mukherjee, Arijit

Low tariff on dirty goods—Environmental negligence or environmental concern? Thumbnail


Sugata Marjit

Professor of Industrial Economics


Shapiro (Quarterly Journal of Economics, 2021) conducts an in-depth empirical analysis to show that dirtier upstream goods face lower import tariffs than cleaner downstream goods. Inspired by that paper, we examine how the welfare maximizing tariffs on the final goods will differ depending on the dirtiness and the extent of cross border pollution. We show that countries concerned about controlling pollution but maximizing own welfare would be encouraged toward relatively unfettered import of dirtier final goods if pollution is mainly generated through domestic production. We discuss the implications of global welfare maximizing tariff protection, pollution taxes, and multiple tradable products.

Journal Article Type Article
Acceptance Date Feb 5, 2023
Online Publication Date Mar 8, 2023
Publication Date 2023-09
Deposit Date Feb 6, 2023
Publicly Available Date Mar 8, 2023
Journal Review of International Economics
Print ISSN 0965-7576
Electronic ISSN 1467-9396
Publisher Wiley
Peer Reviewed Peer Reviewed
Volume 31
Issue 4
Article Number 12662
Pages 1246-1270
Keywords Pollution; Tariff; Welfare
Public URL
Publisher URL


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