Globalization and Environment in the Presence of Cross-border Pollution

@inproceedings{Hatzipanayotou2005GlobalizationAE,
  title={Globalization and Environment in the Presence of Cross-border Pollution},
  author={Panos Hatzipanayotou and Sajal Lahiri and Michael N. Michael},
  year={2005}
}
We construct a two-country, two-good general equilibriummodel of international trade where pollution from production is transmitted across borders. Governments in both countries impose emission taxes non-cooperatively. Within this framework, we examine the effect of trade liberalization on Nash emission taxes, emission levels, and welfare. We also examine how the endogeniety of terms of trade affects Nash equilibrium emmision taxes and total emission level. 

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