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Globalization, Cross-Border Pollution and Welfare

Panos Hatzipanayotou
Athens University of Economics and Business; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Sajal Lahiri
Southern Illinois University at Carbondale - Department of Economics

Michael S. Michael
University of Cyprus - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

June 2005

CESifo Working Paper No. 1479

Abstract:
We construct a two-good general equilibrium model of international trade for two small open economies where pollution from production is transmitted across borders. Governments in both countries impose emission taxes non-cooperatively. Within this framework, we examine the effect of trade liberalization and of changes in the perception of cross-border pollution on Nash emission taxes, emission levels, and welfare.

Keywords: cross-border pollution, emission taxes, terms of trade, globalization, welfare

JEL Classifications: Q28, H23

Working Paper Series

Date posted: July 19, 2005 ; Last revised: July 19, 2005

Suggested Citation

Hatzipanayotou, Panos, Lahiri, Sajal and Michael, Michael S., Globalization, Cross-Border Pollution and Welfare (June 2005). CESifo Working Paper No. 1479. Available at SSRN: http://ssrn.com/abstract=756649

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Contact Information

Panagiotis (Panos) Hatzipanayotou (Xatzipanagiotou) (Contact Author) Athens University of Economics and Business ( email ) 76 Patission Street GR-10434 Athens 104 34 Greece
CESifo (Center for Economic Studies and Ifo Institute for Economic Research) Poschinger Str. 5 DE-81679 Munich Germany HOME PAGE: http://www.CESifo.de
Sajal Lahiri Southern Illinois University at Carbondale - Department of Economics ( email ) Mail Code 4515 Carbondale, IL 62901-4515 United States
Michael S. Michael University of Cyprus - Department of Economics ( email ) 75 Kallipoleos Street P.O. Box 20537 1678 Nicosia Cyprus 357-22892433 (Phone) 357-22892432 (Fax) HOME PAGE: http://www.econ.ucy.ac.cy/staff/michael.htm
CESifo (Center for Economic Studies and Ifo Institute for Economic Research) Poschinger Str. 5 DE-81679 Munich Germany HOME PAGE: http://www.CESifo.de

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