World Trade and the Environment: Issues and Policies

Forthcoming in Pacific Economic Review

42 Pages Posted: 12 May 2014 Last revised: 7 Feb 2015

See all articles by Winston W. Chang

Winston W. Chang

University at Buffalo - Department of Economics

Date Written: February 3, 2015


This paper provides an overview of trade, environmental, and related public issues and policies. It discusses the pollution problem, the recent global warming trend, the attempts of world's various levels of institutions such as the UN, the WTO, regional, national, and other organizations to solve the global trade and environmental issues. It also discusses a number of basic theoretical issues and empirical findings such as the free-rider problem, tragedy of the commons, theory of second best, relative efficacy of price and quantity control, carbon leakage, border carbon adjustments, cap-and-trade system, pollution haven hypothesis, optimal social discount rate and the environmental Kuznets curve. Some computable general equilibrium models are reviewed and several notable WTO environmental and health-related trade dispute cases are analyzed, including the tuna-dolphin, shrimp-turtle, eco-labeling, beef-hormone, and GMOs cases.

Keywords: Trade and environment, Kyoto Protocol, cap and trade, ETS, social discount rate, pollution haven hypothesis, EKC, computable environmental GE models, WTO trade dispute cases

JEL Classification: F18, F53, F55, K33, N5, Q5, Q54, Q56

Suggested Citation

Chang, Winston W., World Trade and the Environment: Issues and Policies (February 3, 2015). Forthcoming in Pacific Economic Review, Available at SSRN: or

Winston W. Chang (Contact Author)

University at Buffalo - Department of Economics ( email )

453 Fronczak Hall
Department of Economics, SUNY at Buffalo
Buffalo, NY 14260
United States
716-645-8671 (Phone)
716-645-2127 (Fax)


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