Trade, Global Policy, and the Environment

'We live in an increasingly interconnected world. Trade flows worldwide are growing rapidly and global production patterns are shifting as countries follow their comparative advantage in production via trade. At the same time, however, there is growing concern about potential adverse environmental impacts from increasing trade.' - John A. Dixon, Lead Economist, The Environment Department, World Bank Interest in the trade and environment debate has intensified as a result of international trade agreements and because many proposed solutions to the climate change problem have potential implications for the global trading system. Clearly more empirical work is needed to inform the debate, guide policymakers toward solutions, and help set priorities. This volume is an attempt to further our understanding of the empirical links between trade and the environment. Thirteen chapters, which were presented as papers at a World Bank conference in April 1998, focus on three main themes: 1. Effects of trade liberalization and growth on the environment 2. The 'pollution haven' hypothesis 3. Economic instruments for resolving global environmental problems. The papers address a number of different issues within each of the themes, offering new data or new questions and approaches. They are devoted to deepening our understanding and empirical knowledge of the various effects of trade liberalization. Only through a firm understanding of the linkages involved can well-founded policy advice be formulated.