Effects of trade policy on natural resources and environment

This paper analyzes the consequences of trade liberalization in Mexico for 2008, regarding the natural resources depletion costs (oil extraction, forestry resources, and groundwater use) and the environmental degradation costs (soil erosion, water, air and soil pollution) by means of a computable general equilibrium model. The results show that the trade liberalization consequences on economic activities were not homogeneous. This situation was due to the natural resources and environment uses in the economic activities. Oil extraction, Livestock farming and Manufactoring industry sectors had the greatest increases in the natural-resources depletion costs. Therefore, Livestock farming, Manufactoring industry, Electricity, gas and waterworks and Transportation, storage and communications sectors had the greatest increases in the environment degradation costs.