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Part IV Extensions
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I n t h e p r e c e d i n g t h r e e p a r t s o f t h i s book w e d i s c u s s e d t h e a n a l y t i c a l framework and s t u d i e d s e v e r a l b a s i c i s s u e s of t r a d e and e n v i r o n m e n t . Although up t o now o u r c o n c e p t was t o e l a b o r a t e t h o r o u g h l y and r i g o r o u s l y t h e most i m p o r t a n t t h e o r e t i c a l q u e s t i o n s , many i n t e r e s t i n g p r o b l e m s of t r a d e and e n v i r o n m e n t h a v e n o t b e e n d e a l t w i t h s o f a r . I n t h e f o l l o w i n g two c h a p t e r s w e f o c u s o u r a t t e n t i o n on two f u r t h e r a s p e c t s o f e n v i r o n m e n t a l c o n t r o l i n open economies t h a t ext e n d t h e p r e v i o u s a n a l y s i s i n two d i f f e r e n t d i r e c t i o n s : W e w i s h t o s t u d y t h e i m p a c t s o f e n v i r o n m e n t a l c o n t r o l s on t r a d e when c a p i t a l m o b i l i t y o r r e c y c l i n g i s i n t r o d u c e d . Chapter 1 1 t r e a t s t h e adjustments t o t h e implementation of an e m i s s i o n t a x i n a t w o - c o u n t r y ,
two-sector,
two-factor
model w i t h c a p i t a l b e i n g an i n t e r n a t i o n a l l y m o b i l e f a c t o r . T h i s a d d i t i o n a l a s s u m p t i o n a l l o w s u s t o i n v e s t i g a t e t h e rea l l o c a t i o n o f c a p i t a l between t r a d i n g c o u n t r i e s a s a c o n s e q u e n c e of n a t i o n a l e n v i r o n m e n t a l p o l i c y . T h u s , some o f t h e previously received r e s u l t s w i l l be q u a l i f i e d o r modified due t o t h e f a c t o r m o b i l i t y assumption. I n chapter 1 2 t h e waste treatment option t o avoid environm e n t a l d i s r u p t i o n i s complemented by t h e p o s s i b l i t y o f r e c y c l i n g which w e c o n c e i v e o f a s t h e r e c l a m a t i o n o f a p r o d u c t i v e i n p u t from t h e ( p r e v i o u s l y u s e l e s s ) b y - p r o d u c t w i t h t h e h e l p of a s c a r c e r e s o u r c e . R e c y c l i n g i s n o t o n l y an important device f o r n a t u r a l resource conservation b u t it i s l i n k e d t o e n v i r o n m e n t a l management a s w e l l , a n d , moreover ,
i t h a s o b v i o u s i n t e r n a t i o n a l d h e n s i o n s i n t r a d i n g econom-ies Several conclusions a r e received with respect t o t h e i n t e r d e p e n d e n c i e s o f n a t i o n a l e n v i r o n m e n t a l p o l i c i e s , changes i n t h e rates o f r e c y c l i n g , c o m p a r a t i v e a d v a n t a g e s and t r a d e .
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I n t h e p r e c e d i n g t h r e e p a r t s o f t h i s book w e d i s c u s s e d t h e a n a l y t i c a l framework and s t u d i e d s e v e r a l b a s i c i s s u e s of t r a d e and e n v i r o n m e n t . Although up t o now o u r c o n c e p t was t o e l a b o r a t e t h o r o u g h l y and r i g o r o u s l y t h e most i m p o r t a n t t h e o r e t i c a l q u e s t i o n s , many i n t e r e s t i n g p r o b l e m s of t r a d e and e n v i r o n m e n t h a v e n o t b e e n d e a l t w i t h s o f a r . I n t h e f o l l o w i n g two c h a p t e r s w e f o c u s o u r a t t e n t i o n on two f u r t h e r a s p e c t s o f e n v i r o n m e n t a l c o n t r o l i n open economies t h a t ext e n d t h e p r e v i o u s a n a l y s i s i n two d i f f e r e n t d i r e c t i o n s : W e w i s h t o s t u d y t h e i m p a c t s o f e n v i r o n m e n t a l c o n t r o l s on t r a d e when c a p i t a l m o b i l i t y o r r e c y c l i n g i s i n t r o d u c e d . Chapter 1 1 t r e a t s t h e adjustments t o t h e implementation of an e m i s s i o n t a x i n a t w o - c o u n t r y ,
two-sector,
two-factor
model w i t h c a p i t a l b e i n g an i n t e r n a t i o n a l l y m o b i l e f a c t o r . T h i s a d d i t i o n a l a s s u m p t i o n a l l o w s u s t o i n v e s t i g a t e t h e rea l l o c a t i o n o f c a p i t a l between t r a d i n g c o u n t r i e s a s a c o n s e q u e n c e of n a t i o n a l e n v i r o n m e n t a l p o l i c y . T h u s , some o f t h e previously received r e s u l t s w i l l be q u a l i f i e d o r modified due t o t h e f a c t o r m o b i l i t y assumption. I n chapter 1 2 t h e waste treatment option t o avoid environm e n t a l d i s r u p t i o n i s complemented by t h e p o s s i b l i t y o f r e c y c l i n g which w e c o n c e i v e o f a s t h e r e c l a m a t i o n o f a p r o d u c t i v e i n p u t from t h e ( p r e v i o u s l y u s e l e s s ) b y - p r o d u c t w i t h t h e h e l p of a s c a r c e r e s o u r c e . R e c y c l i n g i s n o t o n l y an important device f o r n a t u r a l resource conservation b u t it i s l i n k e d t o e n v i r o n m e n t a l management a s w e l l , a n d , moreover ,
i t h a s o b v i o u s i n t e r n a t i o n a l d h e n s i o n s i n t r a d i n g econom-ies Several conclusions a r e received with respect t o t h e i n t e r d e p e n d e n c i e s o f n a t i o n a l e n v i r o n m e n t a l p o l i c i e s , changes i n t h e rates o f r e c y c l i n g , c o m p a r a t i v e a d v a n t a g e s and t r a d e .
.