Handbook of Environmental and Resource Economics
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Handbook of Environmental and Resource Economics

Edited by Jeroen C.J.M. van den Bergh

This major reference book comprises specially commissioned surveys in environmental and resource economics written by an international team of experts. Authoritative yet accessible, each entry provides a state-of-the-art summary of key areas that will be invaluable to researchers, practitioners and advanced students.
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Chapter 28: General Models of Environmental Policy and Foreign Trade

K. Steininger


Karl W Steininger 1. Introduction The path towards answering environmental policy and foreign trade questions lies between - and draws upon -two subfields of economics, namely international and environmental economics. Both are very rich areas in their own right, and a survey of their interlinkage cannot but be selective. This chapter seeks to provide a link between a categorization of the issues on the research agenda, and the body of general equilibrium theory as well as a link to empirical research to shed light on these areas. Some of the links have already been explored; others point to areas of future work. Interest in the field has increased dramatically since the early 1990s. The aim of this survey is to give the flavour of a subject which remains a vibrant and fruitful source of theoretical insight, of testable hypotheses and of illuminating quantification. The rapid integration of the world economy puts questions such as the following high on the agenda: 0 0 0 Which countries export goods the production of which is pollutionintensive? Can a country unilaterally introduce an energy or CO, tax without significant implications for its trade flows or for industry migration? How does trade liberalization affect the environment? Each of these questions represents one key area in a threefold classification of trade and environment issues within economics: (a) in terms of positive theory, the objective of international economics is to explain the manifestation of the international division of labour and resulting trade flows (the pattern of trade)...

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