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Trade integration, environmental degradation, and public health in Chile: assessing the linkages

Published online by Cambridge University Press:  25 April 2002

John C. Beghin
Affiliation:
Iowa State University Economics, 260 Heady Hall, ISU, Ames Iowa 50011–1070, USA. Email: beghin@iastate.edu
Bradley J. Bowland
Affiliation:
Blue-Cross Blue-Shield of Minnesota
Sébastien Dessus
Affiliation:
The World Bank
David Roland-Holst
Affiliation:
Mills College
Dominique van der Mensbrugghe
Affiliation:
The World Bank

Abstract

We use an empirical simulation model to examine links between trade integration, pollution, and public health in Chile. We synthesize economic, engineering, and health data to elucidate this complex relationship and support more coherent policy. Trade integration scenarios examined include Chile's accession to the NAFTA, MERCOSUR, and unilateral opening to world markets. The latter scenario induces substantial worsening of pollution, partly because it facilitates access to cheaper and dirty energy, and has a significant negative effect on urban morbidity and mortality. Damages caused by rising morbidity and mortality are of similar magnitude and substantial. Emissions of small particulates, SO2, and NO2, have the strongest impact on local mortality and morbidity. These three pollutants appear to be complementary in economic activity. Unilateral trade integration combined with a tax on small particulates brings welfare gains, which are 16 per cent higher than those obtained under unilateral trade reform alone.

Type
Theory and Applications
Copyright
© 2002 Cambridge University Press

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