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TRADE AND THE ENVIRONMENT - Coggle Diagram
TRADE AND THE ENVIRONMENT
TRADE POLICY AND ECONOMIC DEVELOPMENT
economic scale
not growth rate but one time expansion
later on impacts output trough induced technoloocal change etc
Practse
more mixed outcomes bc they are mediated through policy
Example: poverty context – if goods with comparative advantage based on unskilled labour-intensive sectors, then freer trade might increase wages … but other mechanisms possible (e.g. worsening employment conditions etc.)
economic growth
Relationship between freer trade and economic development via increase in output and economic growth, via investment and technological change
Infant industry strategies
ISI
Import tariffs to increase domestic prices to level of infant industry average cost
Large domestic market to be effective and needs decision as to when to end tariff regime
Export oriented industrialization
Subsidise firms to be competitive on international market
Costly for government and assumes it can pick winners, and cease subsidy when plan has worked
open economy industrialization
Create investment climate to attract FDI from firms with established expertise/ scale from elsewhere
Might create industrial capacity but not necessarily domestically owned
INTERNATIONAL TRADE AND THE ENVIVTONMENT
key issues
Scale: environmental degradation is higher the higher is economic scale (e.g. GDP level as the economy grows
Composition: Specialisation arises from trade – some countries may pollute more/ less … what is net effect, and (where relevant) impact on distribution of these burdens?
Technique: Access to clean technologies and know-how, perhaps in response to income growth increases demand for environmental policy (in turn supplied by government, via public policy and industry, via cleaner production)
Pollution Heavens
weaker version: lower standards -> higher economic activity
Strong version: lower standards → → → → → → attracting business and investment to relocate
… What is empirical evidence for these effects?
CLIMATE CHANGE
domestic poliicues are sometimes outweighted by importing carbon heavy goods
dirty industires havre lower tarrifs than clean ones
BIODIVERSITY
