TY  - JOUR
AU  - Copeland,Brian R.
AU  - Taylor,M. Scott
TI  - A Simple Model of Trade, Capital Mobility, and the Environment
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5898
PY  - 1997
Y2  - January 1997
UR  - http://www.nber.org/papers/w5898
L1  - http://www.nber.org/papers/w5898.pdf
N1  - Author contact info:
Brian Copeland
Department of Economics
The University of British Columbia
#997-1873 East Mall
Vancouver, BC  V6T 1Z1 CANADA
E-Mail: copeland@econ.ubc.ca

M. Scott Taylor
IEE Canada Research Chair
Department of Economics
The University of Calgary
2500 University Drive, N.W.
Calgary, AB T2N 1N4
CANADA
Tel: 403/220-8912
Fax: 403/282-5262
E-Mail: mstaylor@ucalgary.ca
AB  - This paper examines the interaction between relative factor abundance and income-induced policy differences in determining the pattern of trade and the effect of trade liberalization on pollution.  If a rich and capital abundant North trades with a poor and labor abundant South, then free trade lowers world pollution.  Trade shifts the production of pollution intensive industries to the capital abundant North despite its stricter pollution regulations.  Pollution levels rise in the North while those in the South fall.  These results can be reversed however if the North-South income gap is "too large," in this case, the pattern of trade is driven by income-induced pollution policy differences across countries.  Capital mobility may raise or lower world pollution depending on the pattern of trade.
ER  -