OECD Development Centre Working Papers

The OECD Development Centre links OECD members with developing and emerging economies and fosters debate and discussion to seek creative policy solutions to emerging global issues and development challenges. This series of working papers is intended to disseminate the OECD Development Centre’s research findings rapidly among specialists in the field concerned. These papers are generally available in the original English or French, with a summary in the other language.

English, French

International Trade and the Transfer of Environmental Costs and Benefits

The environmental implications of international trade have come under intensified scrutiny in recent years, particularly with expanded interest in multilateralism, regionalism, and other negotiated trade regimes. The transfer of environmental effects, both positive and negative, is embodied in most trade patterns, particularly those which reflect technological hierarchy or other stratification by degree of economic modernization. Despite the emotional reaction these issues often arouse, the question of whether and to whom these transfers are beneficial or detrimental is a very complex one. In this paper, we use applied general equilibrium analysis to examine a well-established trade relationship between two diverse economies, Japan and Indonesia. Historically, it appears that their bilateral trade has conferred asymmetric environmental effects on the two countries, effecting a net transfer of some environmental costs from the former to the latter. In the light of this negative ...


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