Can Rich Countries become Pollution Havens?

Review of International Economics, Vol. 16, No. 4, pp. 627-640, August 2008

Posted: 23 Aug 2008

See all articles by Victoria I. Umanskaya

Victoria I. Umanskaya

University of California, Riverside (UCR) - Department of Economics

Edward B. Barbier

Colorado State University, Fort Collins - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: 2008

Abstract

This paper bridges the gap between two-country Ricardian trade models where differences in environmental policies create pollution havens in a poorer region with weaker pollution regulations, and 2x2 Heckscher-Ohlin models that predict under certain conditions that pollution havens may occur in a richer region with tighter regulations. By relaxing the Heckscher-Ohlin assumptions of factor price equalization and no specialization, we show how creation of pollution havens in either region is possible, due to the interplay of policy and factor-endowment motives. We also analyze the conditions for creating pollution havens in the cases of exogenous and endogenous environmental policy.

Suggested Citation

Umanskaya, Victoria I. and Barbier, Edward B., Can Rich Countries become Pollution Havens? (2008). Review of International Economics, Vol. 16, No. 4, pp. 627-640, August 2008. Available at SSRN: https://ssrn.com/abstract=1242144

Victoria I. Umanskaya (Contact Author)

University of California, Riverside (UCR) - Department of Economics ( email )

900 University Avenue
4136 Sproul Hall
Riverside, CA 92521
United States
951-827-4975 (Phone)
951-827-5685 (Fax)

Edward B. Barbier

Colorado State University, Fort Collins - Department of Economics ( email )

Fort Collins, CO 80523-1771
United States

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