Department of Agricultural and Resource Economics

This paper contributes to the growing effort to synthesize the fields of trade policy and environmental policy. We discuss: the question of whether international trade undercuts unilateral internalization policies: the role of income constraints in environmental policy; and the possibility of using trade policy to achieve environmental objectives. We review estimates of environmental damage in agricultural production and processing, and we summarize current policy measures. We use a static empirical model to estimate the effects of several internalization policies. We show how a dynamic model can be used to simulate the effects of policy over time, for both environmental and economic variables.