Pollution, welfare, and environmental policy in the theory of Comparative Advantage

doi:10.1016/0095-0696(76)90031-0

Journal of Environmental Economics and Management

Volume 2, Issue 3, February 1976, Pages 160-169

https://doi.org/10.1016/0095-0696(76)90031-0 Get rights and content

Abstract

Within a simple two-sector general equilibrium model it is shown how some well-known propositions of the neoclassical trade theory can be applied to countries with pollution-generating industries. Results are obtained not only under the assumption that the countries do not enforce any environmental policy but also for the case that one or each country implements an environmental price and standard system. In particular, several versions of the Theorem of Comparative Advantage with respect to environmental scarcity are derived, a theorem on welfare losses from trade, and an emission charge equalization theorem.

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^☆: I am grateful to Prof. Dr. H. Siebert, W. Gretz, W. Vogt, and two anonymous referees for helpful comments.

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Pollution, welfare, and environmental policy in the theory of Comparative Advantage☆

Abstract

J. Public Econ.

Environmental quality and international trade

Intern. Organization

Environmental Protection, International Spillovers, and Trade

On taxation and the control of externalities

Amer. Econ. Rev.

The use of standards and prices for the protection of the environment

Swedish J. Econ.

Pollution, purification and the theory of external effects

Swedish J. Econ.

A survey of the theory of international trade: Part 3, The modern theory

Econometrica

Pollution, property and prices