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Regional integration and the environment

Published online by Cambridge University Press:  30 March 2001

ARVIND PANAGARIYA  and
SETHAPUT SUTHIWART-NARUEPUT
ARVIND PANAGARIYA
Affiliation:
Center for International Economics, University of Maryland, College Park, MD 20742, USA. E-mail: panagari@econ.umd.edu
SETHAPUT SUTHIWART-NARUEPUT
Affiliation:
Policy Research Department, The World Bank, 1818 H St NW, Washington, DC 20433, USA. E-mail: ssuthiwartnaruep@worldbank.org
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Abstract

This paper explores the interaction between regional integration and the environment in a formal three-country, three-good model which incorporates pollution. Our main findings are: (1) whether preferential trading improves welfare depends critically on the level of domestic pollution charge extant and the direction of trade; (2) the introduction of preferential trading may lower welfare even when the pollution policy is chosen optimally; and (3) coordination of environmental policies only makes sense when pollution is transnational.

Information

Type
THEORY AND APPLICATIONS
Information
Environment and Development Economics , Volume 2 , Issue 1 , February 1997 , pp. 5 - 18
Copyright
© 1997 Cambridge University Press

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Footnotes

The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the World Bank, its Executive Directors, or the countries they represent.