Transboundary Movements of Waste

University of Ottawa Department of Economics Working Paper No. 1006E

18 Pages Posted: 12 Sep 2010

See all articles by Sophie Bernard

Sophie Bernard

CIRANO and École Polytechnique de Montréal; Polytechnique Montreal

Date Written: August 15, 2010

Abstract

In a stylized model of international trade, a monopolist in the North exports second-hand products to a representative firm in the South to be reused as intermediate goods, with potential trade gains. The degree of reusability of waste products is a crucial choice variable in the North. This is because with a lack of international vigilance, non-reusable waste can be mixed illegally with the reusable waste. I explore the driving forces for the movement of illegal waste, paying particular attention to the role of local waste regulations, such as the EU's Waste Electrical and Electronic Equipment directive. Under mild conditions, it is shown that increased regulation stringency in the North leads its firm to reduce the degree of reusability of its products. As a result, the flow of non-reusable waste to the South increases, providing another channel for the Pollution Haven Hypothesis.

Keywords: Second-Hand Products, Illegal Waste, Environmental Regulation, Trade

JEL Classification: F18, L10, O20, Q53

Suggested Citation

Bernard, Sophie, Transboundary Movements of Waste (August 15, 2010). University of Ottawa Department of Economics Working Paper No. 1006E. Available at SSRN: https://ssrn.com/abstract=1675728 or http://dx.doi.org/10.2139/ssrn.1675728

Sophie Bernard (Contact Author)

CIRANO and École Polytechnique de Montréal ( email )

2020 rue University, 25th floor
Montreal H3C 3J7, Quebec
Canada

Polytechnique Montreal ( email )

Montreal H3C 3A7, Quebec
Canada

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