The New York Times has published a piece about the unintended consequences of U.S environmental regulation. The Times focuses on how U.S lead battery disposal regulation has contributed to our exporting dead batteries to Mexico. If Mexico has more lax disposal regulation and if more people live close to areas where dead batteries are sent, then serious environmental justice issues in Mexico could arise as a consequence of free trade. What should be done about this in the short run and medium run? An economist would say that the long run solution is economic development in Mexico as the nation’s demand for environmental regulation will rise as the country grows richer. Impatient activists will reject this optimism and will counter by saying that “in the long run we are all dead”. Perhaps Keynes will receive a Google Cite for that quote?
As a short run solution, do you support a ban on trade in used cars and their parts? In my own work, I have studied used car trade between the U.S and Mexico.
For a long time, environmental economists have measured the unintended consequences of differential enforcement of Clean Air Act regulation in the United States. If I may be immodest, I helped to start this literature with this 1997 paper and have returned to this topic in this 2010 paper.