Trade and the Environment in General Equilibrium: Evidence from Developing Economies

This book was initiated while the three major authors were at the Development Centre of Organisation for Economic Cooperation and Development (OECD) in Paris, working on its program on economic growth, trade, and sustainability. This work takes a considerable step towards a better-informed debate between free-trader and environmentalist interests brought on in international trade negotiations. It presents results of an empirical investigation of the interaction between growth, international trade, and the environment in Chile, China, Costa Rica, Indonesia, Morocco, and Vietnam, using a common computable general equilibrium modelling approach. The book meshes analytical results, methodology, and detailed empirical analysis in a comprehensive appraisal of the interface between outward-oriented growth and the environment, with particular reference to the policy challenges faced by developing countries. The latter arguably have the greatest stake in successful co-ordination of free trade and domestic environmental policies to achieve higher living standards while protecting their environment. The conjecture of inevitable growth-environment trade-off is not sustained by the analysis. It provides guidance toward constructive reconciliation of economic and environmental aspirations.