Abstract

This paper examines the choice between alternative trade‐based approaches to reducing global environmental damage, such as trade‐related process standards and tariff‐based approaches. Estimates of the effects of alternative policies are presented, using a calibrated global trade model with pollution externalities. It is found that both trade‐related process standards and tariff‐based policies are rather ineffective at reducing global emissions. The adoption of general process standards, however, might be exceedingly costly to developing countries.

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