Management for a Variety of Environmental Pollution and North-South Trade

A simple static model incorporating a variety of environmental pollution is developed. An autarky model shows that a developing country regulates fewer types of pollution by income-induced environmental policy. As income grows, the types of regulated pollution increase and also introduced regulations become tougher.Then the model incorporates international trade between a developed country and a developing country. The model gives a new interpretation for the pollution haven hypothesis. Some types of pollution abated with inefficient technology are emitted more in a developing country but other types necessarily increase in a developed country in order to meet the trade balance.