Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/155196 
Year of Publication: 
2001
Series/Report no.: 
Nota di Lavoro No. 33.2001
Publisher: 
Fondazione Eni Enrico Mattei (FEEM), Milano
Abstract: 
We consider a model with two countries, two commodities and production factors, labour and environment. The countries first choose their environmental standards and then the equilibrium market allocations are determined. We study a subgame perfect Nash equilibrium of this game for two types of environmental problems: regional and international. We examine effects resulting from the transition from autarky to free trade and show that regulating interference with supply and demand may have a positive effect on environmental standards. In particular, a transfer of commodity from one country to the other can increase welfare and raise environmental standards in both countries.
Subjects: 
Free trade
autarky
environmental standards
international and regional environmental problems
JEL: 
F18
C72
Document Type: 
Working Paper

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