An earlier version of this paper was presented at the Opening Plenary Session of the Agricultural Economics Society 79th Annual Conference, University of Nottingham, Nottingham UK, April 4–6, 2005. Thanks are due to the discussant Chris Milner, Tim Haab, two anonymous referees, and editor, David Harvey, for their helpful comments and suggestions on earlier versions of this article.
Trade and Environmental Policy: A Race to the Bottom?
Article first published online: 20 SEP 2006
Journal of Agricultural Economics
Volume 57, Issue 3, pages 365–392, September 2006
How to Cite
Sheldon, I. (2006), Trade and Environmental Policy: A Race to the Bottom?. Journal of Agricultural Economics, 57: 365–392. doi: 10.1111/j.1477-9552.2006.00056.x
- Issue published online: 20 SEP 2006
- Article first published online: 20 SEP 2006
- (Original submitted May 2005, revision received June 2006, accepted June 2006.)
- Environmental policy;
- race to the bottom;
The focus of this paper is the issue of regulatory chill and a race to the bottom in environmental standards and policies. In particular, it explores the possibility that resolution of this problem may lie in a more flexible application of the existing General Agreement on Tariffs and Trade/World Trade Organization (GATT/WTO) rules. The structure of the discussion is divided into four parts: (i) the standard analysis of trade and environmental policy is laid out; (ii) the theoretical analysis of and empirical evidence for the existence of pollution havens is reviewed; (iii) the main arguments as to why governments may weaken domestic environmental policy with greater trade liberalisation is outlined; and (iv) some recent analysis of border tax adjustments for environmental taxes is laid out, leading to the basic conclusion of the paper: a method for countering any tendency for regulatory chill and a race to the bottom in environmental policies is already embedded in existing GATT/WTO rules.