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GTAP Resource #1551

"A Comparison of the Environmental Impacts of Trade versus Domestic Distortions in the United States"
by Stone, Susan, Jared Creason, Michael Fisher and Svetlana Semoneva

There is a great deal of concern, both among environmental activists and the general public, about the affects of globalization on the environment. One particularly contentious issue is that of trade liberalization. However, is all the concern being shown for the effect of increased trade on the environment misplaced? Should we instead be focusing our efforts on the distortions created by domestic policies as a greater source of potentially adverse environmental effects? This paper compares the environmental impacts of different types of subsidies/restrictions on the US economy. The paper presents the results of several scenarios surrounding the removal of two types of restrictions: trade and domestic subsidies. The GTAP model and database will be used to derive economic changes while the environmental effects will be assessed using the Trade and Environment Assessment Model (TEAM). This model was developed for the EPA by Abt Associates. TEAM converts national level economic outcomes into changes at the 6-digit NAICS level, covering over 1,200 sectors at the county level. The sum of the county level values reported in TEAM account for over 96 percent of the national totals measured at the 2-digit level.

The TEAM model reports outcomes for over 900 chemicals covering four broad emissions/resource use categories: water (use, direct and indirect discharges), air (point source, mobile source and area source), agriculture (land use and chemical use) and hazardous waste. Emissions factors are derived, when available, from facility-level data. The data were collected from a variety of sources including the US Geological Survey’s Aggregate Water-Use Data System, National Emission Inventory and National Toxics Inventory, the Permit Compliance System, the Toxic Release Inventory, and the US Department of Agriculture’s Agricultural Chemicals Usage and Agricultural Census documents. From this data, average emission factors are calculated for each chemical, by sector and county.

First, domestic distortions will be removed from the US and its trading partners. The economic effects of this exercise will then be fed into the TEAM to determine environmental impacts across the US. The same process will be repeated for trade restrictions/subsidies. The results will be compared. Given that the ultimate affect of trade liberalization on the environment is an empirical question, is difficult to predict a priori, which will have the larger impact.

Resource Details (Export Citation) GTAP Keywords
Category: 2004 Conference Paper
Status: Published
By/In: Presented at the 7th Annual Conference on Global Economic Analysis, Washington DC, USA
Date: 2004
Created: Stone, S. (5/7/2004)
Updated: Stone, S. (5/7/2004)
Visits: 3,281
No keywords have been specified.

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