caa a22 4500 378924761 CHVBK 20180305123614.0 cr unu---uuuuu 161128e20041108xx s 000 0 eng 10.2202/1538-0637.1331 doi (NATIONALLICENCE)gruyter-10.2202/1538-0637.1331 Managed Trade, Trade Liberalisation and Local Pollution [Elektronische Daten] [Pierre M Regibeau, Alberto Gallegos] Abstract The current paper addresses the relationship between trade and endogenous pollution levels, with a focus different from the previous literature. The mechanism linking pollution and trade here is that trade policy provides the home government with a credible threat that helps motivate domestic firms to adopt cleaner technologies. This credible threat comes from the fact that the government has a greater incentive to protect a clean industry than to protect a very polluting one. In that sense, the existence of trade helps reduce domestic pollution compared to what would prevail in a situation of autarky. On the other hand, a commitment to free trade would be counterproductive: it removes the government’s ability to credibly threaten lower levels of protection. In fact we show that any trade liberalization hurts the welfare of the home country. In terms of world welfare, moderate trade liberalization is helpful, but only as long as it does not affect the technology choices of the firms. Because committing to lower ‘bounded’ tariffs limits a government’s ability to enforce strict environmental standards, a country that has agreed to tighter tariff limits under the World Trade Organization would, other things equal, be a more likely “pollution haven” than a country with weaker WTO commitments. ©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston pollution nationallicence trade nationallicence environment nationallicence Regibeau Pierre M. University of Essex, pregib@essex.ac.uk aut Gallegos Alberto ITESM Mexico City, gallegos@itesm.mx aut Advances in Economic Analysis & Policy De Gruyter 3/2(2004-11-08) 3:2 2004 3 bejeap https://doi.org/10.2202/1538-0637.1331 text/html Onlinezugriff via DOI 1 research article jats NATIONALLICENCE 856 40 https://doi.org/10.2202/1538-0637.1331 text/html Onlinezugriff via DOI NATIONALLICENCE 700 1- Regibeau Pierre M. University of Essex, pregib@essex.ac.uk aut NATIONALLICENCE 700 1- Gallegos Alberto ITESM Mexico City, gallegos@itesm.mx aut NATIONALLICENCE 773 0- Advances in Economic Analysis & Policy De Gruyter 3/2(2004-11-08) 3:2 2004 3 bejeap CC0 http://creativecommons.org/publicdomain/zero/1.0 nationallicence BK010053 XK010053 XK010000 NATIONALLICENCE NATIONALLICENCE NL-gruyter