The interface between growth, trade, pollution and natural resource use in Chile: evidence from an economywide model
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We investigate the implications of trade liberalization and pollution taxes on aggregate income, pollution, and natural resource
use in Chile with a neoclassical economywide model comprising 75 sectors. The model incorporates 13 measures of pollution
effluents which are linked to the use of polluting inputs and energy use. We estimate the economic and environmental impact
of Chile's participation in NAFfA, MERCOSUR, of unilateral trade liberalization and effluent taxes. Unilateral trade
liberalization induces substantial worsening of pollution emissions and expansion of resource-based sectors, partly because of
access to cheaper energy. NAFfA integration is environmentally benign in terms of pollution emissions. © 1998 Elsevier
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