(United States) and the South (China) in the presence of a global pollution externality. Each country's share of global … pollution depends on its share of world capital. The authors show that, if the disutility of pollution in the United States is … the increased pollution in China has global effects, the US may not benefit from the environmental restrictions and a …

) and the South (China) in the presence of a global pollution externality. Each country's share of global pollution depends … on its share of world capital. We show that, if the disutility of pollution in the United States is high, there will be … pressure on the US to raise environmental regulations on industry. Capital will move to China. Because the increased pollution …