M Scott Taylor

University of Calgary, Economics, Faculty Member

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Emptying the Tank: Getting the most out of Limited Data

for helpful comments, and J. Taylor-McGregor for help with the title. The views expressed herein ... more for helpful comments, and J. Taylor-McGregor for help with the title. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

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International Trade and the Environment: A Framework for Analysis

This paper sets out a general equilibrium pollution and trade model to provide a framework for ex... more This paper sets out a general equilibrium pollution and trade model to provide a framework for examination of the trade and environment debate. The model contains as special cases a canonical pollution haven model as well as the standard Heckscher-Ohlin-Samuelson factor endowments model. We draw quite heavily from trade theory, but develop a simple pollution demand and supply system featuring marginal abatement cost and marginal damage schedules familiar to environmental economists. We have intentionally kept the model simple to facilitate extensions examining the environmental consequences of growth, the impact of trade liberalization, and strategic interaction between countries.

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Trade, Tragedy, and the Commons

American Economic Review, 2009

We develop a theory of resource management where the degree to which countries escape the tragedy... more We develop a theory of resource management where the degree to which countries escape the tragedy of the commons, and hence the de facto property rights regime, is endogenously determined. Three forces determine success or failure in resource management: the regulator's enforcement power, the extent of harvesting capacity, and the ability of the resource to generate competitive returns without being extinguished. The model can explain heterogeneity across countries and resources in the effectiveness of resource management, and it predicts that changes in prices, population, and technology can cause transitions to better or worse management regimes. (JEL P14, Q21, Q22, Q23, Q32)

format_quoteMonitoring issues primarily cause de facto open access scenarios rather than outright lack of property rights.format_quote

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The Green Solow model

Journal of Economic Growth, 2010

We demonstrate that a key empirical finding in environmental economics-The Environmental Kuznets ... more We demonstrate that a key empirical finding in environmental economics-The Environmental Kuznets Curve-and the core model of modern macroeconomics-the Solow model-are intimately related. Once we amend the Solow model to incorporate technological progress in abatement, the EKC is a necessary by product of convergence to a sustainable growth path. Our amended model, which we dub the "Green Solow", generates an EKC relationship between both the flow of pollution emissions and income per capita, and the stock of environmental quality and income per capita. The resulting EKC may be humped shaped or strictly declining. We explain why current methods for estimating an EKC are likely to fail whenever they fail to account for crosscountry heterogeneity in either initial conditions or deep parameters. We then develop an alternative empirical method closely related to tests of income convergence employed in the macro literature. Preliminary tests of the model's predictions are investigated using data from OECD countries.

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Unmasking the Pollution Haven Effect

International Economic Review, 2008

for comments, and to Akito Matsumoto and Sjamsu Rahardja for research assistance. Taylor thanks t... more for comments, and to Akito Matsumoto and Sjamsu Rahardja for research assistance. Taylor thanks the Princeton Economics department for its hospitality during the time he worked on this paper, and the Vilas Trust at UW for funding. The views expressed herein are those of the author(s) and not necessarily those of the National Bureau of Economic Research.

format_quoteA 1% increase in pollution abatement costs correlates with a 0.2% increase in U.S. imports from Mexico and 0.4% from Canada.format_quote

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Unbundling the Pollution Haven Hypothesis

Advances in Economic Analysis & Policy, 2005

The "Pollution Haven Hypothesis" (PHH) is one of the most hotly debated predictions in ... more The "Pollution Haven Hypothesis" (PHH) is one of the most hotly debated predictions in all of international economics. This paper explains the theory behind the PHH by dividing the hypothesis into a series of logical steps linking assumptions on exogenous country characteristics to predictions on trade flows and pollution levels. I then discuss recent theoretical and empirical contributions investigating the PHH to show how each contribution either questions the logical inevitability, or the empirical significance of one or more steps in the pollution haven chain of logic. Suggestions for future research are also provided.

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A Simple Model of Trade, Capital Mobility, and the Environment

Kong. We thank participants for their comments. Financial support from SSHRC, the Killam Trusts, ... more Kong. We thank participants for their comments. Financial support from SSHRC, the Killam Trusts, and the Canadian Institute for Advanced Research is gratefully acknowledged. This paper is part ofNBER's research program in International Trade and Investment. Any opinions expressed are those of the authors and not those of the National Bureau of Economic Research.

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A Simple Model of Trade, Capital Mobility, and the Environment

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Economic growth and the environment: a review of theory and empirics

The relationship between economic growth and the environment is, and may always remain, controver... more The relationship between economic growth and the environment is, and may always remain, controversial. Some see the emergence of new pollution problems, the lack of success in dealing with global warming and the still rising population in the Third World as proof positive that humans are a short-sighted and rapacious species. Others however see the glass as half full. They note the tremendous progress made in providing

format_quoteEnvironmental quality in developed countries has improved significantly over the last 30 years, with reduced emissions and cleaner cities.format_quote

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given to the source. Economic Growth and the Environment: A Review of Theory and Empirics

This paper reviews both theory and empirical work on economic growth and the environment. We deve... more This paper reviews both theory and empirical work on economic growth and the environment. We develop four simple growth models to help us identify key features generating sustainable growth. We show how some combination of technological progress in abatement, intensified abatement, shifts in the composition of national output and induced innovation are necessary for sustainable growth, and then demonstrate how growth models employing any one of these mechanisms generate other potentially refutable predictions on abatement costs, pollution levels, or emission intensities.

format_quoteEmissions of regulated pollutants in developed countries show a notable decline over the last 30 years, reflecting improved environmental quality.format_quote

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2004), "The Green Solow Model

Abstract: We argue that a key empirical nding in environmental economics- The Environmental Kuzn... more Abstract: We argue that a key empirical nding in environmental economics- The Environmental Kuznets Curve- and the core model of modern macroeconomics- the Solow model- are intimately related. Once we amend the Solow model to incorporate technological progress in abatement, the EKC is a necessary by product of convergence to a sustainable growth path. We explain why current methods for estimating an EKC are likely to fail; provide an alternative empirical method directly tied to our theory; and estimate our model on carbon emissions from 173 countries over the 1960-1998 period.

format_quoteThe Green Solow model predicts convergence in emissions per capita across countries, linking model to empirical observations.format_quote

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for comments. The usual disclaimer applies. Excellent research assistance was provided by Jevan C... more

format_quoteSupply of energy is a cubic function of power density, implying doubling density results in an eightfold increase in energy supply.format_quote

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Free Trade and Global Warming: A Trade Theory View of the Kyoto Protocol

This paper demonstrates how three important results in environmental economics, true under mild c... more This paper demonstrates how three important results in environmental economics, true under mild conditions in closed economies, are false or need serious amendment in a world with international trade in goods. Since the three results we highlight have framed much of the ongoing discussion and research on the Kyoto protocol our viewpoint from trade theory suggests a re-examination may be in order. Specifically, we demonstrate that in an open trading world, but not in a closed economy setting: (1) unilateral emission reductions by the rich North can create self-interested emission reductions by the unconstrained poor South; (2) simple rules for allocating emission reductions across countries (such as uniform reductions) may well be efficient even if international trade in emission permits is not allowed; and (3) when international emission permit trade does occur it may make both participants in the trade worse off and increase global emissions.

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Is Free Trade Good for the Environment?

This paper investigates how openness to international goods markets affects pollution concentrati... more This paper investigates how openness to international goods markets affects pollution concentrations. We develop a theoretical model to divide trade’s impact on pollution into scale, technique and composition effects and then examine this theory using data on sulfur dioxide concentrations from the Global Environment Monitoring Project. We find international trade creates relatively small changes in pollution concentrations when it alters the composition, and hence the pollution intensity, of national output. Our estimates of the associated technique and scale effects created by trade imply a net reduction in pollution from these sources. Combining our estimates of scale, composition and technique effects yields a somewhat surprising conclusion: freer trade appears to be good for the environment.

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The Green Solow model Author ( s )

We argue that a key empirical finding in environmental economics the Environmental Kuznets Curve ... more We argue that a key empirical finding in environmental economics the Environmental Kuznets Curve (EKC) and the core model of modern macroeconomics the Solow model are intimately related. Once we amend the Solow model to incorporate technological progress in abatement, the EKC is a necessary by product of convergence to a sustainable growth path. We explain why current methods for estimating an EKC are likely to fail; provide an alternative empirical method directly tied to our theory; and estimate our model on carbon emissions from 173 countries over the 1960-1998 period.

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Globalization: Myths and Realities Conference

Energy and the Location of Economic Activity

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Comments on "Frontier Expansion" (Barbier)

Three Arguments Against CO2 Permit Trade

Environmental and resource economics: A Canadian retrospective

Canadian Journal of Economics/Revue canadienne d'économique

The paper reviews research contributions to environmental and resource economics by scholars in C... more The paper reviews research contributions to environmental and resource economics by scholars in Canada. We focus mainly on work from the past 25 years but also highlight earlier pathbreaking work. We begin by looking at broad trends in research both internationally and within Canada. We then review Canadian contributions to various topics in the field. Canadians have played a leading role in the development of the field, especially in resource economics, international environmental economics and the valuation of environmental amenities.

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