Contingent Trade Agreements /
There are often conflicts between proponents of trade and environmental activists. This paper shows, however, how trade agreements can be designed so as to motivate environmental conservation. I first analyze a standard trade model, where resource exploitation (e.g., deforestation) is a trade-specif...
Gespeichert in:
- 1. Verfasser:
- Körperschaft:
- Format:
- Elektronisch E-Book
- Sprache:
- Englisch
- Veröffentlicht:
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Cambridge, Mass.
National Bureau of Economic Research
2024.
- Zusammenfassung:
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There are often conflicts between proponents of trade and environmental activists. This paper shows, however, how trade agreements can be designed so as to motivate environmental conservation. I first analyze a standard trade model, where resource exploitation (e.g., deforestation) is a trade-specific investment that causes environmental damage. In this model, traditional trade agreements will cause more exploitation. Next, I investigate the extent to which conservation can be motivated by a contingent trade agreement (CTA), where default tariffs can vary with changes in the resource stock (e.g., the forest cover). The model permits many products, countries, and collaborators. A numerical example suggests that growth and liberalization can cause Brazil's agricultural area to expand by 27%, but this expansion can be avoided if the EU and the US offer a CTA.
- Umfang:
- 1 online resource: illustrations (black and white);
- Anmerkungen:
- May 2024.
- Schlagworte: