Consi der t he nor t h sout h model wher e t he envi

Consi der t he Nor t h- Sout h
model wher e t he envi r onment
ent er s as an i nput
of pr oduct i on, E . Envi r onment al
i nput s wi l l be shown
t o have a par t i cul ar l y
pr onounced
ef f ect on t he pat t er n
of i nt er nat i onal t r ade . Thi s can be
seen as
f ol l ows .
Recal l t hat our model has
pr i ce- dependent suppl y
f unct i ons f or envi r onmen-
t al r esour ces, gi ven by
PE
=
PE( E) ,
wher e
PE
i s t he pr i ce of a uni t of t he
envi r onment al r esour ce E . The
i mpor t ance of t hi s pr i ce dependence became
cl ear i n Lemma l
wher e we pr oved t hat
t he
suppl y f unct i on of an envi r onment al
r esour ce depends on t he
nat ur e of t he pr oper t y
r i ght s f or t hat r esour ce .
Thi s i n
t ur n
wi l l det er m i ne t he pat t er ns
of t r ade .
Consi der
t he common pr oper t y r esour ce
E . I f t her e ar e no r egul at i ons con-
cer ni ng t he use of t he
r esour ce and no enf or ceabl e
pr i vat e pr oper t y r i ght s i n t hi s
r esour ce, t hen t he
cost t o an i ndi vi dual of
ext r act i ng an addi t i onal uni t of E as
an i nput
of pr oduct i on
wi l l be r el at i vel y l ow . Thi s
wi l l mer el y r ef l ect t he pr i vat e
cost s such
as e . g . i n t he case
of a f i sher y, t he pr i vat e
cost s of
cat chi ng,
and
i n
t he
case of an aqui f er , t he
pr i vat e cost s of obt ai ni ng t he wat er .
They
wi l l
not

3 6
GRACI ELA CHI CHI LNI SKY
r ef l ect t he
f ul l i mpact on soci et y of t he use of t he r esour ce, whi ch : n t he case
of
t he f i sher y coul d
event ual l y be t he depl et i on of t he st ock . I n
t he case
of t he
aqui f er t hi s coul d be damage
f r om over use such as t he sal i nat i on whi ch t akes
pl ace when
wat er l evel s f al l bel ow cr i t i cal l evel s ( Dasgupt a, 1982) . I f however
ext er nal i t i es
ar e f ul l y i nt er nal i zed ( by r egul at i on or by pr oper t y r i ght s) so t hat
t he cost t o
an i ndi vi dual of usi ng t he r esour ce r ef l ect s f ul l y t he soci al cost s of
i t s use,
t hen t he pr i vat e cost s
wi l l
be
hi gher
and coul d i ncr ease
r api dl y
wi t h t he
l evel of use ( Dasgupt a and
Heal , 1979, Chapt er 3) .
Di f f er ences
i n
t he
st r uct ur e of pr oper t y r i ght s i n t he ext r act i on of t he r esour ce
t hat i s used
as an i nput of pr oduct i on
wi l l
t her ef or e be r ef l ect ed i n
di f f er ences i n
t he
suppl y condi t i ons of
t hat r esour ce . I n i ndust r i al democr aci es pr oper t y r i ght s
ar e bet t er est abl i shed
and mor e wi del y enf or ceabl e t han i n devel opi ng count r i es,
and r egul at or y pol i ci es
desi gned t o i nt er nal i ze cost s of usi ng an envi r onment al
r esour ce ( such
as pol l ut i ng cl ean
ai r
wi t h aut omobi l e exhaust f umes, or
bur ni ng
coal
f or heat i ng pur poses)
ar e mor e wi despr ead
and
wi del y enf or ced . Thi s i s
due
i n par t t o t he
l ar ge cost s associ at ed wi t h a l egal i nf r ast r uct ur e and a syst em
of enf or cement
and cont r ol : such cost s ar e r el at i vel y mor e accessi bl e t o r i ch