Exports and Externalities: the other sideof trade and ecological risk

This paper develops a general equilibrium model to measure welfare eects of taxesfor correcting environmental externalities caused by domestic trade, focusing on externalities that arise through exports. Externalities from exports come from a number ofsources. Domestically owned ships, planes, and automobiles can become contaminatedwhile visiting other regions and bring unwanted pests home, and species can be introduced by contaminated visitors that enter a region to consume goods and services.The paper combines insights from the public nance literature on corrective environmental taxes and trade literature on domestically provided services. We nd that pastmethods for measuring welfare effects are inadequate for a wide range of externalitiesand show the most widely used corrective mechanism, taxes on the sector imposing theenvironmental externality, may often do more harm than good. The motivation for thispaper is the expansion of invasive species' ranges within the United States. We applyour analytical model to the specic example of quagga and zebra mussel (Dreissenapolymorpha and Dreissena rostiformis bugenis) invasion into the U.S Pacic Northwest....