FEEM working papers "Note di lavoro" series
2000 .056

Can Green Lobbies Replace a World Environmental Organisation?

Authors: Paola Conconi
Series: Climate Change and Sustainable Development
Editor: Carlo Carraro
Type: Journal
Keywords: Environmental protection,international trade,political contributions
JEL n.: D72,F13,Q20,Q28
JEL: Journal of International Economics
Pages: Vol. 59, Issue 2, pp. 399-422
Date: 2003


We employ a common agency model to examine how green lobbies affect the determination of trade and environmental policy in two large countries that are linked through trade flows and transboundary pollution. We show that, when governments are not restricted in their ability to use trade barriers, environmental lobbying always results in higher pollution taxes relative to a no-lobbying scenario. Consequently, uncoordinated environmental policies are closer to the efficient Pigouvian solution than internationally coordinated policies. If, however, governments are bound by international trade rules, green lobbies may bias environmental policies downwards and environmental policy coordination is unambiguously efficiency-enhancing.

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