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Integration of environmental externalities in international commodity agreements
World Development (1992)
  • Henk LM Kox, CPB Netherlands Bureau for Economic Policy Analysis

Much ecological damage in Third World countries is associated with commodity production for the world market. Competition in commodity markets prevents commodity-exporting countries from making the costs of environmental preservation and reconstruction a recurrent element in pricing. This article argues that an international commodity agreement (ICA) can be the institutional locus where environmental externalities associated with commodity production can be integrated into a price system. Such extended or transformed ICAs are here labeled “New International Commodity Agreements” (NICAs). They include a price markup for environmental preservation and reconstruction in commodity-producing developing countries. This price markup can be levied in the form of an export tax or in the form of a surcharge on import tariffs. The conclusion of NICAs maybe facilitated by the Common Fund for Commodities which has recently come into operation.

  • Environmental externalities; commodity trade; commodity agreements; developing countries
Publication Date
Citation Information
Henk LM Kox. "Integration of environmental externalities in international commodity agreements" World Development Vol. 19 Iss. 8 (1992)
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