Abstract:
The study uses a Computable General Equilibrium (CGE) model to analyze the impact of trade liberalization on pollution and poverty in Lao PDR. Results show that trade liberalization has a small but positive effect on growth. As well, trade liberalization slightly decreases CO2 emissions, due mainly to declining output in some sectors. In terms of socio-economic impact, findings show that households in Vientiane, (capital city) and non-poor urban households will benefit most from trade liberalization, whereas many poor rural households will suffer a drop in income. Recommendations include finding ways to protect rural populations and strengthening regulations to protect the environment.
