The literature on trade liberalization and environment has not considered federal structures. This paper shows how the design of environmental policy in a federal system has implications for the effects of trade reform. Trade liberalization leads to a decline in pollution taxes regardless of...

The Pollution-Haven Hypothesis suggests that tight environmental standards reduce domestic producers' competitiveness and give rise to their relocating to countries with more lenient standards. This paper questions that relocation is always caused by reduced competitiveness at home. By using a...

The literature on trade liberalization and environment has not considered federal structures. This paper shows how the design of environmental policy in a federal system has implications for the effects of trade reform. Trade liberalization leads to a decline in pollution taxes regardless of...