لابی های سبز و آلودگی فرامرزی در اقتصادهای بزرگ باز

We employ a common agency model of policy making to examine how green lobbies affect the determination of trade and environmental policies in two large countries that are linked by trade flows and transboundary pollution. We show that the impact of green lobbying on environmental policy outcomes depends crucially on the prevailing trade regime—cooperative or non-cooperative—on whether environmental agencies act in a unilateral or coordinated manner, and on the size of the emission leakages and transboundary spillovers. Under free trade, a unilateral increase in pollution taxes reduces domestic emissions at the cost of increased foreign emissions; in this case, if the emission leakages and the associated transboundary spillovers are large enough, green lobbying can create a bias towards lower pollution taxes.

This paper examines how the presence of green lobbies may affect the determination of trade and environmental policies in large countries linked by trade flows and transboundary pollution. It is widely recognized that, in the presence of transboundary pollution, uncoordinated environmental regulation at the national level is associated with market failures and that economic efficiency requires international policy cooperation. In the absence of cooperation, there is a presumption that, by exerting political pressure in favor of higher domestic pollution taxes, green lobbies might act as a partial remedy.1 In this paper, we argue that, when countries are large and environmental emissions spill over to trading partners, the presumption that green lobbying must lead to the adoption of stricter environmental policy is potentially misleading. This is because an increase in pollution taxes by a large country shifts the terms of trade in favor of trading partners, leading to an increase in their emissions. If the effect of domestic policies on foreign emissions (“emission leakages”), and the associated transboundary spillovers are large enough, unilateral efforts to reduce pollution by taxing domestic producers might actually increase environmental degradation and thus be opposed by green lobbies. Since the environmental policy leakage can be eliminated either through the use of import tariffs or through environmental policy coordination, the impact of green lobbying on the environmental policy outcome will also depend crucially on whether or not governments are bound by a free trade agreement and on whether they act in a unilateral or cooperative manner. The possibility of emission leakages has received attention in various empirical studies on transboundary pollution, which have come to conflicting conclusions about the magnitude of such trade-related environmental effects. Some simulation-based studies find that unilateral actions to curb CO2 emissions would have relatively small adverse effects on other countries’ emissions.2 Other studies find that the emission leakages could be significant.3 The reasons behind these contradictory results lie partly in the different assumptions about supply and demand elasticities, and partly in the general difficulties encountered in estimating actual emission spillovers.4 Concerns about the emission leakages generated by unilateral efforts to reduce pollution have also been raised in the policy debates in Europe and the United States.5 In spite of this debate, surprisingly, the theoretical literature on transboundary pollution6 has largely ignored the problem of emission leakages.7 In early work in this area, Markusen, 1975a and Markusen, 1975b considers a model of two trading countries linked by a bilateral production externality. He characterizes optimal unilateral and cooperative trade and environmental policies, but does not consider the fact that, by unilaterally taxing its domestic firms, a country can encourage foreign production and emissions. Copeland and Taylor (1995) examine the interactions between pollution, income levels, and the patterns of trade in a general equilibrium setting. The bulk of their analysis focuses on small countries, thus leaving aside the problem of emission leakages.8 In this paper, we describe a common agency model of lobby influence of the kind introduced by Grossman and Helpman (1994). Green and producer lobbies confront incumbent politicians with contributions schedules, namely functions relating their binding promise of political support to the selected policies. Governments are semibenevolent, in the sense that they care both about social welfare and campaign contributions. We use this model to examine the impact of green lobbying on environmental policy outcomes, under alternative assumptions about the trade regime—whether or not governments are bound by a free trade agreement—and the decision-making process—whether governments act in a unilateral or cooperative manner. We first focus on the policies adopted by two symmetric countries under the influence of national green lobbies. We show that, when international rules restrain trade policy intervention at the national level and governments act unilaterally, it is possible for green lobbying to create a bias towards lower pollution taxes. We then extend the analysis to the case in which governments are influenced by an international green lobby and the case in which both green and pro-industry lobbies are organized. We also explore the implications of country asymmetries. Finally, focusing on the case of symmetric countries, we examine the impact of green lobbying on the comparative efficiency of unilateral and cooperative environmental policy outcomes. Our results suggest that environmental policy coordination might be comparatively more beneficial under a free trade regime. The importance of the interaction between trade regimes and the stringency of environmental regulation has been recognized in a number of studies.9 However, since these studies focus on small economies and local environmental problems, they leave aside the issues of environmental policy leakages, emission spillovers, and international cooperation, which are central to our analysis. Our paper also contributes to a growing literature which examines the influence of interest groups on policy-making. Most existing studies, however, focus on a single policy instrument.10 To the best of our knowledge, ours is the only study looking at the role of green lobbies on the joint determination of trade and environmental policies in large open economies. The remainder of the paper is organized as follows. Section 2 describes the model. Section 3 examines the impact of green lobbying on unilateral and cooperative environmental policy outcomes. Section 4 concludes.

We have investigated how the presence of green lobbies can influence environmental policy determination in the presence of transboundary pollution in economies that are linked by trade flows and are large. The main results of our analysis can be summarized as follows: (i) the impact of green lobbying on the environmental policy outcomes depends on the existing trade policy regime, the type of decision-making process, and the size of the emission leakages and the associated transboundary spillovers; (ii) in the absence of pre-existing international trade rules, green lobbying unambiguously creates a bias towards the adoption of higher pollution taxes; (iii) when governments are bound by free trade rules but select environmental policy unilaterally, the existence of emission leakages reduces (and might even reverse) green lobbies’ support for higher pollution taxes. Does the presence of green lobbies weaken the need for environmental policy coordination? The analysis above suggests that the answer to this question depends crucially on the degree of trade policy cooperation. On the one hand, countries that have not committed to trade cooperation might find it more efficient to choose policies in a unilateral manner. On the other hand, countries that are already cooperating on trade policies are more likely to gain by coordinating their environmental policies too. At the international level, our findings suggest that the existence of WTO rules restricting governments’ ability to use trade barriers implies the need for the creation of a World Environmental Organization (WEO).38 However, if WTO rules are not binding39 unilateral policy-making could lead to more efficient policy outcomes. At the regional level, our results hint at the need for environmental cooperation among the members of preferential trade agreements such as the E.U., NAFTA, MERCOSUR and ASEAN.40 The analytical framework described in this paper is highly simplified and the results obtained must be interpreted with caution. More work is needed to examine how economic policies, including trade and environmental policies, are determined by political and economic interests. For example, it would be interesting to incorporate the analysis of the underlying electoral process into the common agency model adopted in this paper, to provide clearer microfoundation for the governments’ objective functions. More attention should also be devoted to the analysis of the process of lobby formation, to explain how some groups of citizens overcome the free-rider problem of collective action and become politically organized.