Trade Liberalisation and the Environment: The Case of the Uruguay Round

The impact of the Uruguay Round of trade negotiations on emissions of carbon dioxide and four local air pollutants is estimated. Results indicate that most developing and transition regions will experience an increase in emissions of all five pollutants as a result of the Uruguay Round. In the developed regions, emissions of three local air pollutants are predicted to gall while nitrogen dioxide and carbon dioxide emissions generally rise. The analysis of the composition effect associated with the Uruguay Round highlights the sectors which may require additional abatement efforts. The expansion of the textile sectors in virtually all developing regions is predicted to lead to an increase in emissions of all four local air pollutants. In the developed regions it is the heavy industrial sectors which are predicted to expand as a result of the Uruguay Round, again leading to increases in emissions of all four local pollutants. These increases are particularly large due to the high pollution intensities associated with the output from these sectors.