Environmental Product Standards in North-South Trade

Author Name ISHIKAWA Jota  (Faculty Fellow, RIETI) /OKUBO Toshihiro  (Kobe University)
Creation Date/NO. March 2010 10-E-011
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One channel through which the environment can be damaged is consumption. To protect the environment, various product standards are introduced throughout the world. By using a new economic geography framework, this paper explores the effects of environmental product standards on the environment in a North-South trade model. We examine a situation in which the North unilaterally introduces an environmental product standard. Specifically, those products that do not meet the standard are prohibited from being sold in the North market. We find that such a standard may worsen the environment in the North but improve the environment in the South through firm relocation.

Published: Jota Ishikawa and Toshihiro Okubo, 2011. "Environmental Product Standards in North-South Trade," Review of Development Economics, Vol. 15(3), pp. 458-473.