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 language | English |
|---|---|
| Pages (from-to) | 331-345 |
| Number of pages | 15 |
| Journal | Environmental and Resource Economics |
| Volume | 76 |
| Early online date | 7 Jun 2020 |
| DOIs | |
| Publication status | Published - Jul 2020 |
Keywords
- International Environmental Agreements
- Environmental taxation
- international trade
- Pareto efficiency
- Pareto improving reforms
- Climate change
- International environmental agreements
- International trade
- POLLUTION
- POLICIES
- CLIMATE
Access to Document
- Montagna2020_Article_WelfareAndTradeEffectsOfIntern_VOR
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