The problem characterizes a one-directional transboundary stock externality and a local (domestic) stock externality.
Results show that cooperation depends on whether the project addresses transboundary wastewater pollution.
It has to proactively contribute to stopping transboundary movement of hazardous wastes, for global environmental problems are inter-related, calling for holistic, comprehensive solutions.
In the second case, pollution is transboundary and governments interact strategically with respect to both trade and environmental quality.
This study may be viewed as a step towards developing a methodology for studying empirically international trade and transboundary pollution problems.
Transboundary water pollution concerns water-borne waste that crosses international political boundaries as a result of natural water flow.
However, these papers are concerned with transboundary environmental damage-a very different situation than examined in this paper.
In this paper we keep to the specific case of subsidies to environmental projects (abatement) when pollution is transboundary.
