Low tariff on dirty goods—Environmental negligence or environmental concern?

Abstract Shapiro ( Quarterly Journal of Economics , 2021) conducts an in‐depth empirical analysis to show that dirtier upstream goods face lower import tariffs than cleaner downstream goods. Inspired by paper, we examine how the welfare maximizing on final will differ depending dirtiness and extent cross border pollution. We countries concerned about controlling pollution but own would be encouraged toward relatively unfettered if is mainly generated through domestic production. discuss implications global tariff protection, taxes, multiple tradable products.