Abstract

The environment is one of the main concerns in global policies and affects many of the other factors including economic and political. This study aims to express the effect of the trade liberalization policy on environmental pollution in the frame of a multi-regional system model. Thus, the GTAP-E model was utilized for the year 2019, so that the environmental consequences (in terms of measurement of CO2 emission) studied as the result of reducing the tariffs on import. In two scenarios, the impact of the shock of reduction importation tariffs on the gross domestic production, CO2 emissions and the sum of the value added of the economy in the eight sections introduced in the model as indicators, technical and composition effects. The results in both cases indicate a reduction in the scale, technical and composition effects, and thus improve the environment.

Project Number

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Trade Liberalization and Environmental Pollution in Iran

Abstract

The environment is one of the main concerns in global policies and affects many other factors including the economy. Trade liberalization would affect environmental quality through its effect on production. This study aims to express the effect of the trade liberalization policy on environmental pollution in the frame of a multi-regional system model. Thus, the GTAP-E model was utilized for the year 2019, so that the environmental consequences (in terms of measurement of CO2 emission) could be studied as the result of reducing the tariffs on import in the forms of two scenarios. In the first scenario, the import tariff on agricultural, industry and services products was reduced by 5%, and in the second scenario, the import tariff on the agricultural, industry and services sectors was reduced by 5%, 10% and 15%, respectively. The results obtained in both cases indicate a reduction in the effect of scale, technique and composition. The results indicate that an import tariff reduction in the various sectors of the economy reduces pollution emissions and its effects improve the environment. The second scenario has a greater effect on the different sectors and also is closer to the reality of Iran’s economy.

Keywords

• Trade liberalization
• Environment pollution
• CO2 emission
• Global trade analysis project model
• Tariff

Supporting Institution

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Project Number

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Thanks

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