Welfare and Trade Effects of International Environmental Agreements

Catia Montagna, Avanti Nisha Pinto, Nikolaos Vlassis* (Corresponding Author)

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

5 Citations (Scopus)
7 Downloads (Pure)

Abstract

We analyse the welfare effects of environmental policy arising from the formation of an international environmental agreement on the participating and non-participating countries and thus shed light on the potential incentives for a country to join such an agreement. Within a N-country Q-goods general equilibrium framework under free-trade conditions, we consider unilateral and cooperative policy settings and, within the latter, country-specific and fully harmonized policies within the agreement. A key result of the paper is the emergence of a negative relationship, arising from terms of trade effects, between the welfare changes of the participating and non-participating countries following the formation of the agreement. These however do not result in a zero sum welfare outcome for the world as a whole.

Original languageEnglish
Pages (from-to)331-345
Number of pages15
JournalEnvironmental and Resource Economics
Volume76
Early online date7 Jun 2020
DOIs
Publication statusPublished - Jul 2020

Bibliographical note

Open access via Springer Compact Agreement
We are grateful to two anonymous referees and to the Editor of the Journal for very constructive suggestions. We would also like to thank participants at the EAEAE annual conference in Athens and at the Scottish Economic Society annual conference in Perth. The usual disclaimer applies.

Keywords

  • International Environmental Agreements
  • Environmental taxation
  • international trade
  • Pareto efficiency
  • Pareto improving reforms
  • Climate change
  • International environmental agreements
  • International trade
  • POLLUTION
  • POLICIES
  • CLIMATE

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