Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/252113 
Authors: 
Year of Publication: 
2022
Series/Report no.: 
CESifo Working Paper No. 9596
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Can trade agreements motivate environmental conservation? I first present a model whereby the government in the South expands its production capacity (e.g., deforest) before trading with the North. After deriving negative relationships between tariff reductions and conservation, I show how all negative results are reversed if countries can negotiate a contingent trade agreement (CTA), where default tariffs vary with changes in the production capacity (or forest cover). A calibration suggests that growth and liberalization can cause Brazil's agricultural area to expand by 27%, but this expansion can be avoided if the EU and the US offer a CTA.
Subjects: 
international trade
trade agreements
deforestation
environmental conservation
JEL: 
F18
F13
F550Q560
Q37
Document Type: 
Working Paper
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