Trade in Environmental Permits and Technological Transfer in a Structuralist North-South Model

Abstract

This paper introduces the Razmi (2016) model, including technology transfers from the postindustrial Global North regarding environmental technologies to the comparatively underdeveloped Global South. We examine the varying impact of regulations and technology transfer policies for greenhouse gas emissions and pollution exports with and without an international permit trading market. The main conclusions are as follows. With a sufficient international permit trading market, policies that promote technology transfer to the South or reduce pollution exports increase the North–South gap. Such policies reduce the North–South gap without an international emissions trading market. In sum, specific environmental policies and North–South interests differ depending on the presence or absence of an international permit trading market.