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Environmental Product Standards in North–South Trade
Author(s) -
Ishikawa Jota,
Okubo Toshihiro
Publication year - 2011
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/j.1467-9361.2011.00620.x
Subject(s) - economics , product (mathematics) , international trade , natural resource economics , international economics , mathematics , geometry
Consumption is one channel through which the environment is damaged. To protect the environment, various product standards have been introduced across the world. This paper uses a new economic geography framework to explore the effects of environmental product standards on environment in a North–South trade model. It examines the situation in which the North unilaterally introduces an environmental product standard. Specifically, those products that do not meet the standard are not allowed to be sold in the North's market. It is found that such a standard may worsen the North's environment but improve the South's environment as a result of firm relocation.