Conclusions and Policy Recommendations

When framing policies for making trade and the environment mutually compatible, it is important to understand the complexity of their interlinkages, particularly when they are juxtaposed against development. Trade liberalisation may under some circumstances be beneficial to the environment by, for instance, improving resource allocation, but under other circumstances it may exacerbate existing environmental problems. Similarly, environmental rules in developed countries may constitute barriers to trade and imply onerous adjustments for developing countries in some instances, but in others they may provide an opportunity to improve the environment and simultaneously gain trade benefits. This book has demonstrated that the question of whether trade liberalisation is beneficial to the environment or whether environmental policies generate significant trade effects is ultimately one that is empirical in nature. The important question is not whether these impacts will or will not arise, because they certainly will, but how quantitatively important they are in practice.