Environmental Economics and the International Economy

This volume includes a selection of papers presented at the EURESCO Conference “The International Dimension of Environmental Policy” held in Kerkrade, The Netherlands, in October 2000. We would like to thank those who made this conference possible: the Eu

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Economy & Environment VOLUME 25

Scientific Advisory Board Scott Barrett, School of Advanced International Studies, Johns Hopkins University, Washington DC, U.S.A. Klaus Conrad, University of Mannheim, Mannheim, Germany David James, Ecoservices Pty. Ltd., Whale Beach, New South Wales, Australia Bengt J. Kriström, University of Umea, Sweden Raymond Prince, Congressional Budget Office, U.S. Congress, Washington DC, U.S.A. Domenico Siniscalco, ENI-Enrico Mattei, Milano, Italy / University of Torino, Italy

The titles published in this series are listed at the end of this volume.

Environmental Economics and the International Economy Edited by

Laura Marsiliani Wallis Institute of Political Economy, University of Rochester, U.S.A. and University of Durham, U.K.

Michael Rauscher Rostock University, Germany

and

Cees Withagen Tilburg University and Free University, The Netherlands

KLUWER ACADEMIC PUBLISHERS NEW YORK, BOSTON, DORDRECHT, LONDON, MOSCOW

eBook ISBN: Print ISBN:

0-306-48021-2 1-4020-0841-4

©2003 Kluwer Academic Publishers New York, Boston, Dordrecht, London, Moscow Print ©2002 Kluwer Academic Publishers Dordrecht All rights reserved No part of this eBook may be reproduced or transmitted in any form or by any means, electronic, mechanical, recording, or otherwise, without written consent from the Publisher Created in the United States of America Visit Kluwer Online at: and Kluwer's eBookstore at:

http://kluweronline.com http://ebooks.kluweronline.com

CONTENTS

Preface

Introduction

Greener Taxes, Freer Trade? Environmental Policy and Tariff Reduction in a Second-Best World Sjak Smulders and Partha Sen

vii

ix

1

North-South Trade and Pollution Migration: The Debate Revisited Meeta Keswani Mehra and Satya P. Das

21

Regulatory Competition, Transboundary Pollution and International Trade Isabelle Péchoux and Jérôme Pouyet

33

Modelling Commitment in a Multi-Stage Models of Location, Trade and Environment Alistair Ulph and Laura Valentini

55

International Competition and Investment in Abatement: Taxes versus Standards Talitha Feenstra, Aart de Zeeuw and Peter M. Kort

89

Environmental Policy Under Product Differentiation and Asymmetric Costs: Does Leapfrogging Occur and Is It Worth It? Jacqueline Rothfels

99

VI

CONTENTS

The Stringency of Environmental Regulation and the “Porter Hypothesis” Thomas Roediger-Schluga

123

Measuring the Effects of Environmental Regulations on Manufacturing Plant Births: A New Empirical Paradigm John A. List and Daniel L. Millimet

149

The Impact of Environmental Regulations on Capital Flows: Some Methodological Considerations Catherine Y. Co, Henk Folmer, Tim Jeppesen, John A. List and W. Warren McHone

177

Environmental Policy and Firms’ Decision-Making About Location Choice. Application of a Decision-Making Model to the Case of a Fertilizer Plant Henk van der Veen, Tom A.B. Snijder and Henk Folmer

185

The Efficiency, Equity and Politics of Emissions Permit Trading Myrna Wooders and Ben Zissimos

203

Should Emissions Reduction Units Be Tradable? Matti L