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- Title
Trade, Growth, and the Environment.
- Authors
Copeland, Brian R.; Taylor, M. Scott
- Abstract
The article examines the environmental consequences of economic growth and international trade. Both the empirical and theoretical literature with the aid of a relatively simple general equilibrium is discussed in this article. The economic literature on these issues came in two waves, with an initial surge of activity in the 1970s, and a resurgence of interest stimulated by the policy debates. The link between incomes per capita and environmental quality is examined. While the link between income growth and the environment is important, trade may alter environmental outcomes through a variety of other channels. Trade may encourage a relocaton of polluting industries from countries with strict environmental policy to those with stringent policy. These shifts may in turn increase global pollution or they may have a chilling effect on environmental policy, as countries will be reluctant to tighten environmental regulations because of concerns over international competitiveness. To examine these additional concerns, the environmental impact of trade liberalization is evaluated. The first conclusion is that there is a great deal of evidence supporting the view that rising incomes affect environment quality in a positive way. A second major finding is that the previous consensus that environmental policy does not affect trade and investment flows was premature.
- Subjects
ECONOMIC development; INTERNATIONAL trade; ENVIRONMENTAL policy; ENVIRONMENTAL economics; ENVIRONMENTAL impact analysis
- Publication
Journal of Economic Literature, 2004, Vol 42, Issue 1, p7
- ISSN
0022-0515
- Publication type
Article
- DOI
10.1257/.42.1.7