North American economic integration and industrial pollution in the Great Lakes region

Abstract. This paper provides an assessment of the impact of increased economic integration within North America on industrial pollution intensities within the Great Lake states of the United States. It utilizes a three-country, applied general equilibrium model of the North American economy, data from the World Bank’s Industrial Pollution Projection System, and employment data from the US Bureau of Economic Analysis to simulate the industrial pol-lution impacts of North American trade liberalization within the Great Lakes region. The results reflect the liberalization of tari ¤ and non-tari ¤ barriers, their trade and production impacts, state-level shares in the production changes, and the resulting industrial e¿uent changes. Two trade liberalization experiments show that, in many cases, the Great Lake states account for a substantial por-tion of the total emission changes caused by North American economic inte-gration. Of particular concern to the Great Lake states are the emissions of the base metals, transportation equipment, and petroleum sectors. JEL classification: C68, F14, Q2 1