Multilateral Environmental Agreements and Trade Obligations: A Theoretical Analysis of the Doha Proposal

Arbeitspapier

The Doha declaration on trade and environment proposed to clarify the relationship between multilateral environmental agreement (MEA) trade obligations and WTO rules by only guaranteeing economic integration upon ratification of certain MEAs. In other words, it pushed to authorize the use of trade measures against non-compliance, denying a non-signatory of its WTO rights to exercise countervailing tariffs. This paper demonstrates that the Doha proposal can be effective when environmental policy and its trade obligations are endogenous. Under plausible circumstances, ratification by a non-signatory to the MEA along with free trade as a reward is the unique equilibrium outcome. Delocation to pollution havens does not occur, as optimal tariffs are positive if standards are not adopted. Tariffs however only work as a credible threat and do not emerge in equilibrium. Results are consistent with broad empirical evidence that opposes the pollution haven hypothesis and suggests capital movements to be non-pollution related.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Nota di Lavoro ; No. 52.2005

Classification and Topics

• Classification: Wirtschaft ; Trade Policy; International Trade Organizations ; Trade and Environment ; Multinational Firms; International Business ; Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies ; Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth ; Production Analysis and Firm Location: Government Policy
• Subject: Environmental policy ; WTO ; Location of firms ; Green tariffs ; Multilateral environmental agreements ; Doha declaration

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Naghavi, Alireza
• Event: Veröffentlichung
• (who): Fondazione Eni Enrico Mattei (FEEM)
• (where): Milano
• (when): 2005

Further information

• Handle: http://hdl.handle.net/10419/74281
• Last update: 10.03.2025, 11:42 AM CET