CONICET | Buscador de Institutos y Recursos Humanos

Current literature about trade liberalization ofenvironmental goods and services (EGS) raises doubts about theextent of the triple win-win situation for trade, development and theenvironment. However, much of this literature does not consider thepossibility that this agreement carries technological transmissions,either through trade or foreign direct investment. This paper presentsa computable general equilibrium model calibrated for Argentina,where there are alternative technologies (one dirty and one cleanaccording to carbon emissions) to produce the same goods. In thiscontext, the trade liberalization of EGS allows to increase GDP,trade, reduce unemployment and improve the households welfare.However, the capital mobility appears as the key assumption tojointly reach the environmental target, when the positive scale effectgenerated by the increase in trade is offset by the change in thecomposition of production (composition and technical effects bythe use of the clean alternative technology) and of consumption(composition effect by substitution of relatively less pollutingimported goods).