The purpose of this project is to extend the existing economic analysis of environmental problems from an essentially domestic perspective to one that incorporates explicitly the issues arising in an international economy linked by trade, financial, and environmental flows. The point of departure for this research is a general conceptual framework that sets out the international gains from trade in environmental services. The specific research agenda addresses the issues of: (1) the international transport and disposal of hazardous wastes; (2) the role of developing countries in the management of the global environment, (3) the design and implementation of global measures for environmental regulation, and (4) the potential for using trade measures to penalize and provide inducements to countries that ignore the broader social costs of their economic activities. A central theme running through this research is the importance of distortions in world prices and their implications for realizing the potential gains from trade in environmental services.
