Trade Liberalization and Pollution: Evidence from the Philippines
Rafaelita M. Adalba
Caesar B. Cororaton
The study assesses the impact of trade reforms in the Philippines on pollution using computable general equilibrium (CGE) model simulations. It focuses on the manufacturing industry and its pollution effects and examines whether trade liberalization is compatible with efforts to promote environmental protection. Generally, the results of the CGE simulations showed that trade reform is output augmenting and income improving. The overall impact on pollution is very little. The overall change in the level of emission for all pollutants is very small relative to the case where there is no tariff reform program. The results of the sensitivity analysis indicate that a change in production technology is a major factor that can check the problems of pollution in the process of industrialization.
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