We construct a two-country trade model where emissions are an input in production and generate cross-border pollution. We examine the strategic incentives of an active regulator who sets a binding level of emissions in production. We show that, in the presence of terms of trade and emission leakage strategic motives, tighter regulation can mitigate emission leakage, reduce global pollution, and improve a country’s welfare. This result and the corresponding policy implications depend on the relative magnitude of emissions intensities of goods between sectors and on their relationship in production and consumption.

中文翻译：

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监管严格性和排放泄漏缓解

我们构建了一个两国贸易模型，其中排放作为生产投入并产生跨境污染。我们研究了主动监管者的战略激励措施，该监管者设定了生产排放的约束水平。我们表明，在存在贸易条件和排放泄漏战略动机的情况下，更严格的监管可以减轻排放泄漏，减少全球污染，并提高一个国家的福利。这一结果和相应的政策影响取决于部门之间商品排放强度的相对大小及其在生产和消费中的关系。