Environmental Legislation and International Trade: Theory, Policy and Indian experience

This paper considers some contemporary environmental problems like carbon emission, deforestation etc, faced by mainly the developing nations of the world. In this context I have considered some facts and figures of Indian Tannery industry for realization of above mentioned issue. In this paper an attempt has been made to analyze theoretically, the effect of environmental pollution on the output of different sectors in a small open economy. Here, I have presented a theoretical model based on the general equilibrium framework, which mainly highlights on a paradoxical result. The paradox exists in the sense that, with strict environmental control, the formal sector subcontracts their production to the informal sector, thereby accentuating the total level of pollution faced by the society