Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/102724
Authors: 
Gwatipedza, Johnson
Barbier, Edward
Year of Publication: 
2014
Citation: 
[Journal:] Economics: The Open-Access, Open-Assessment E-Journal [Volume:] 8 [Issue:] 2014-30 [Pages:] 1-37
Abstract: 
Bilateral trade and capital flows have increased substantially between the United States and China yielding economic gains to both countries. However, these beneficial bilateral relations also bring about global environmental consequences including greenhouse gas emissions. The authors develop a footloose capital model of international trade between the North (United States) and the South (China) in the presence of a global pollution externality. Each country's share of global pollution depends on its share of world capital. The authors show that, if the disutility of pollution in the United States is high, there will be pressure on the US to raise environmental regulations on industry. Capital will move to China. Because the increased pollution in China has global effects, the US may not benefit from the environmental restrictions and a joint regulation of pollution by both parties may be a preferred outcome. The authors also show that the implementation of differential control policies by the parties may also be optimal.
Subjects: 
global pollution externality
agglomeration
environmental regulation
global warming
greenhouse gas emissions
JEL: 
D43
Q54
F18
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/3.0/
Document Type: 
Article

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.