Title
Import Tariffs as Environmental Policy Instruments,Used
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The theoretical claims for ecotariffs are rigorously analyzed within a unified framework formed of an international trade model enriched with both a domestic and a global externality. During the course of the analysis the model is modified to analyze an array of contexts for which ecotariffs have been claimed to improve environmental quality or welfare. The circumstances and conditions are characterised under which such tariffs can be shown to improve environmental quality and social welfare, taking account of general equilibrium effects. The theoretical results are applied in a policy analysis of ecotariffs and other trade instruments in the context of domestic and global environmental policy in order to assess the relevance of the ecotariffs that have been subjected to the theoretical analysis. Finally, the GATT/WTO rules and regulations are presented, since to date these have banned the use of ecotariffs. The rules and regulations are mapped against the theoretical results to show which rules ought to be changed.
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