Abstract
This paper addresses a broad set of concerns expressed by environmentalists in recent debates over further moves towards trade liberalisation — such as the Single European Market, the Uruguay Round of GATT and especially NAFTA — that in the absence of the ability to use trade instruments to protect domestic industries governments might seek to weaken their domestic environmental policies as a means of covert protection. Conventional trade models based on competitive markets provides no grounds for such concerns (see Ulph (1993b) for a recent summary of these arguments), but it is possible to find some basis for these concerns in models of imperfectly competitive trade, building on the literature on strategic international trade (see Helpman and Krugman (1989) for a review). There is now a small literature which has developed variants of the basic Brander and Spencer (1985) “rent-shifting” model to show that governments may indeed be tempted to engage in “ecological dumping” — i.e. relaxing their environmental policies relative to the usual “first-best” rule of equating marginal costs of abatement and marginal costs of damage (see Barrett (1994), Conrad (1993), Kennedy (1994), Rauscher (1992), Ulph (1993a), Ulph and Ulph (1994), among others, and, for a survey, Ulph (1994)).
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsPreview
Unable to display preview. Download preview PDF.
References
Barrett, S. (1994). “Strategic Environmental Policy and International Trade”, Journal of Public Economics, (forthcoming).
Brander, J., Spencer, B. (1985). “Export Subsidies and International Market Share Rivalry”, Journal of International Economics, 18, pp. 83–100.
Conrad, K. (1983). “Taxes and Subsidies for Pollution-Intensive Industries as Trade Policy”, Journal of Environmental Economics and Management, 25, pp. 121–135.
Helpman, E., Krugman, P. (1989). Trade Policy and Market Structure, MIT Press, Cambridge, Ma.
Kennedy, P. W. (1994). “Equilibrium Pollution Taxes in Open Economies with Imperfect Competition”, Journal of Environmental Economics and Management, 27, pp. 49–63.
Rauscher, M. (1992). “On Ecological Dumping”, in C. Carraro (ed.) The International Dimension of Environmental Policy, Kluwer, Dordrecht.
Ulph, A. (1993a). “Environmental Policy and International Trade When Governments and Producers Act Strategically”, Journal of Environmental Economics and Management (forthcoming).
Ulph, A. (1993b). “Strategic Environmental Policy, International Trade and the Single European Market” in J. Braden, H. Folmer and T. Ulen (eds.), Environmental Policy with Economic and Political Integration: The European Community and the United States, Edward Elgar (forthcoming).
Ulph, A. (1994). “Environmental Policy and International Trade — a Survey of recent Economic Analysis” Paper presented to Workshop on Designing Economic Policy for Management of Natural Resources and the Environment, Crete, September 1994.
Ulph, D. (1993). “Strategic Innovation and Strategic Environmental Policy” in C. Carraro (ed.) The International Dimension of Environmental Policy, Kluwer Dordrecht, (forthcoming).
Ulph, A. and D. Ulph (1994). “Trade, Strategic Innovation and Strategic Environmental Policy — A General Analysis”, Ch. 10 in this volume.
Author information
Authors and Affiliations
Editor information
Rights and permissions
Copyright information
© 1996 Springer Science+Business Media Dordrecht
About this chapter
Cite this chapter
Ulph, A. (1996). Strategic environmental policy and international trade — the role of market conduct. In: Carraro, C., Katsoulacos, Y., Xepapadeas, A. (eds) Environmental Policy and Market Structure. Economics, Energy and Environment, vol 4. Springer, Dordrecht. https://doi.org/10.1007/978-94-015-8642-9_6
Download citation
DOI: https://doi.org/10.1007/978-94-015-8642-9_6
Publisher Name: Springer, Dordrecht
Print ISBN: 978-90-481-4600-0
Online ISBN: 978-94-015-8642-9
eBook Packages: Springer Book Archive