ABSTRACT
The trade and environment issue has acquired a high profile, particularly following the General Agreement on Tariffs and Trade (GATT) panel report on the tuna/dolphin dispute between Mexico and the United States, the subsequent discussion of trade and environment in the GATT. Modeling works which have sought to capture trade and environment linkages, or have done so indirectly as a result of other modeling efforts, mainly reflect numerical general equilibrium modeling. The environmental component of the model is an overlay on top of the economic component, with five different forms of pollutants specified—nitrogen oxide, methane, organic compounds, sulphur oxide, and carbon dioxide. The chapter summarizes the models which have been used for a variety of different analyses, and their results provide significant input for the debate on trade and environment interactions. The trade consequences of major environmental interventions not figuring prominently in the trade and environment debate, such as a possible global carbon tax, seemingly could be considerably more substantial.
