One of the most perplexing issues concerning the international economic dimensions of environmental management has to do with transfrontier pollution (TFP), which is perhaps of more direct policy relevance and immediacy than some of the more indirect questions — such as trade implications — that we have already discussed in considerable detail. The latter arise from international differences in national pollution-control programmes. TFP relates to the direct impact of pollution caused by economic activities undertaken in one national state on the welfare of people living in another. It is a matter, therefore, of transboundary externalities which require negotiated settlement between governments.* As a problem of international conciliation, TFP as an issue is distinctly multidisciplinary in character, requiring the skills of lawyers and political scientists as well as economists and ecologists — as part of a ‘package’ of political and economic issues to be resolved in inter-government negotiations. Moreover, there may be considerable slippage between identification and definition of a TFP problem and its eventual resolution.
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