Trade and Environment

I. Introduction.- II. The Issues of Interlinkage.- 1. Environmental Regulation Affecting Trade Flows.- 1.1. Product Regulation.- 1.2. Production Process Regulation.- 2. Trade Liberalization Affecting the State of the Environment.- 3. Further Interlinkages.- 3.1. Trade Bans to Save Endangered Species.- 3.2. Trade Policy as an Enforcement Instrument for International Environmental Agreements.- 3.3. Trade Implications of International Environmental Initiatives.- III. The Regulatory Issue.- 1. Current International Regulation.- 1.1. The General Agreement on Tariffs and Trade (GATT).- 1.1.1. Environmental Production Process Regulation and its Cost Allocation.- 1.1.2. Environmental Product Regulation.- 1.1.3. Exceptions for Environmental Regulation in GATT.- 1.2. The OECD Guiding Principles.- 1.3. European Community Legislation.- 2. Theoretical Background.- 2.1. The Effects of Trade Liberalization on the Environment.- 2.1.1. National Environmental Policy Set Sufficiently.- 2.1.2. National Environmental Policy Set Insufficiently.- 2.1.3. Conclusion.- 2.2. Evaluating Trade Measures for Environmental Ends.- 2.2.1. Cases where Trade Strongly Contributes to the Environmental Problem.- 2.2.2. Geographic Scope of the Environmental Problem.- 2.2.2.1. Global and Transboundary Environmental Problems.- 2.2.2.2. National and Local Environmental Problems.- 3. Opposing Demands for a Regulatory Change and its Paradigmatic Background.- 3.1. Paradigms of the Interrelationship between Economy and Environment.- 3.2. Conclusions for the Trade and Environment Relationship.- 3.2.1. Frontier Economics and Environmental Protection.- 3.2.2. Resource Management.- 3.2.3. Eco-Development.- 3.3. Conclusion for Further Regulatory Development.- IV. Divergent Environmental Process Regulation in Open Economies.- 1. Theoretical Approaches.- 1.1. Effects of Environmental Policy in a Traditional Trade Theory Model.- 1.2. Economic Geography and the Choice of Clean Industry Location.- 1.3. Environmental Policy and Strategic International Trade.- 1.3.1. Environmental Policy Affecting Strategic Producer Behavior.- 1.3.2. Environmental Policy as a Strategic Trade Instrument of Governments.- 1.4. Environmental Policy, Innovation and Competition.- 2. Empirical Evidence.- 2.1. Environmental Policy Affecting Production and Trade.- 2.1.1. Recent Empirical Studies.- 2.1.2. Limitations of the Studies.- 2.1.2.1. Determination of Environmental Control Costs.- 2.1.2.2. Time Period.- 2.1.2.3. Benefits.- 2.2. Environmental Policy Affecting Industry Location.- 3. Considerations for Austria.- 3.1. Environmental Control Costs.- 3.2. International Competitiveness in Industries with Strict Environmental Regulation.- 3.3. Environmental Goods and Services Industries.- 3.4. Criteria for Further Empirical Analysis.- V. Modeling the Environment-Economy Interaction for Austria in a Trade-Focused Computable General Equilibrium Framework.- 1. The Method of Computable General Equilibrium Modeling.- 1.1. Computable General Equilibrium Modeling for Environmental Policy Analysis.- 1.2. Basic Characteristics of a Computable General Equilibrium Model.- 1.2.1. Idea and Model Structure.- 1.2.2. Time Horizon, Comparative Static and Dynamic Models.- 1.3 The History of Computable General Equilibrium Modeling and its Major Applications.- 1.3.1. The Johansen Approach.- 1.3.2. The Development of Solution Techniques.- 1.3.2.1. Solution Strategies.- 1.3.2.2. Solution Algorithms.- 1.3.3. A Classification of Current Traditions and Applications.- 1.4 Environmental Computable General Equilibrium Models.- 1.4.1. Overview.- 1.4.2. Characteristics and Results of Recent Environmental CGE Studies.- 1.4.2.1. Single Country and Single Region Static Modeling.- 1.4.2.2. Single Country Dynamic Modeling.- 1.4.2.3. Multi Country Modeling.- 2. The Austrian Environment and Trade Model.- 2.1. Model Structure.- 2.1.1. Production.- 2.1.2. Trade.- 2.1.3. Environment.- 2.1.3.1. Emissions.- 2.1.3.2. Environmental Policy.- 2.1.3.3. The Energy Sector.- 2.2. Formal Description.- 2.2.1. Costs.- 2.2.2. Demand.- 2.2.3. Producer Behavior.- 2.2.4. Permits Market.- 2.2.5. GDP.- 2.3. Data Basis.- 2.3.1. Social Accounting Matrix.- 2.3.2. Energy Expenses.- 2.3.3. Energy Supply.- 2.3.4. Emissions.- 2.3.5. Time Behavior Parameters.- 2.3.5.1. Productivity Changes.- 2.3.5.2. Factor Growth.- 2.3.5.3. Elasticities of Substitution.- 2.4. Implementation.- 3. Policy Simulations — The Effects of Unilateral Policy.- 3.1. Base Case.- 3.2. Environmental Policy.- 3.2.1. Unilateral, Sectorally Uniform Environmental Policy.- 3.2.2. Unilateral, Sectorally Differentiated Environmental Policy.- 3.3. Conclusions.- 3.4. Benefits.- 3.5. Evaluation of the CGE Approach.- VI. Conclusions.- 1. Categorizing the Issues.- 2. Current International Regulation.- 3. Trade and Environment in the Theoretical Framework.- 4. Trade Measures for Environmental Ends?.- 5. Paradigmatic Background.- 6. Further Regulatory Development.- 7. Effects of Divergent Process Regulation.- 8. The Case of Austria.- 9. Empirical Quantification of the Economic Effects of Unilateral Environmental Action.- Appendix 1 Uruguay Round Decision on Trade and Environment.- Appendix 2 Environmental Policy Shifting the General Equilibrium Supply Curves in a Trade Model.- Appendix 3 A Schematic Social Accounting Matrix.- Appendix 4 Tables.- References — General.- References — CGE.