Economics, Econometrics and Finance
4 years ago

Trade liberalization in Indonesia may worsen pollution levels, but tax policy offers hope.

CRC Press eBooks
The Environment and Welfare Implications of Trade and Tax Policy
Hiro Lee, David Roland‐Holst

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Developing countries like Indonesia need to balance economic growth with environmental protection. By analyzing how trade affects the environment, researchers found that opening up trade could lead to more pollution. However, combining trade liberalization with effective pollution taxes can improve both welfare and environmental quality. This shows that trade can play a positive role in sustainable development.