Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/315251 
Year of Publication: 
2024
Citation: 
[Journal:] Environmental and Resource Economics [ISSN:] 1573-1502 [Volume:] 87 [Issue:] 6 [Publisher:] Springer Netherlands [Place:] Dordrecht [Year:] 2024 [Pages:] 1407-1424
Publisher: 
Springer Netherlands, Dordrecht
Abstract: 
We construct a two-country trade model where emissions are an input in production and generate cross-border pollution. We examine the strategic incentives of an active regulator who sets a binding level of emissions in production. We show that, in the presence of terms of trade and emission leakage strategic motives, tighter regulation can mitigate emission leakage, reduce global pollution, and improve a country’s welfare. This result and the corresponding policy implications depend on the relative magnitude of emissions intensities of goods between sectors and on their relationship in production and consumption.
Subjects: 
Environmental regulation
International trade
Emission leakage
Cross-border pollution
JEL: 
F18
H23
Q54
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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