One for All, All for One? Unilateral Policy Choices Reconsidered

Global pollution emissions can, and, may, hinder bilateral trade liberalization. Recognizing the urgency of responding to climate change and trade protections, this paper presents a policy rule unilaterally introduced by "large" nations. I call it the environmental preservation rule. Specifically, domestic taxes and trade taxes are used together to contain the increase in Home consumption pollution. Doing so reduces pollution emissions abroad while increasing market access. This rule helps countries exit from excessive regulation and is good for the climate.