Environmental Control Costs and U.S. Effective Rates of Protection

Abstract

This study investigates the impact of U.S. environmental control costs on the Abstract effective rates of protection given to U.S. industrial sectors in 1977. The effective rate of protection equation is modified in order to quantify the loss of protection due to environmental control costs and compare it to the protection afforded by the tariff structure. Results are presented for the following two cases: (1) only direct environmental control costs influence the net level of protection, and (2) direct environmental control costs and environmental control costs borne by inputs influence the net level of protection. For the case with direct environmental control costs and environmental control costs borne by inputs, the loss ofprotection due to environmental control costs is 19.67% of the protection afforded by the U.S. tariff structure.