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Liberalizing trade in environmental goods and services

Dijkstra, Bouwe; Mathew, Anuj

Authors

Anuj Mathew



Abstract

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).

Journal Article Type Article
Publication Date Aug 25, 2015
Journal Environmental Economics and Policy Studies
Print ISSN 1432-847X
Electronic ISSN 1432-847X
Publisher Humana Press
Peer Reviewed Peer Reviewed
APA6 Citation Dijkstra, B., & Mathew, A. (2015). Liberalizing trade in environmental goods and services. Environmental Economics and Policy Studies, doi:10.1007/s10018-015-0121-6
DOI https://doi.org/10.1007/s10018-015-0121-6
Publisher URL http://link.springer.com/article/10.1007%2Fs10018-015-0121-6
Copyright Statement Copyright information regarding this work can be found at the following address: http://eprints.nottingh.../end_user_agreement.pdf

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Copyright Statement
Copyright information regarding this work can be found at the following address: http://eprints.nottingham.ac.uk/end_user_agreement.pdf





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