THE POLITICAL-ECONOMY OF THE GLOBAL ENVIRONMENT

Issues of the 'global commons' have secured a prominent place in envir onmental discourse. The temperature-regulating functions of the global atmosphere and radiation central functions of stratospheric ozone off er clear examples of true public goods. Other environmental assets, su ch as biodiversity and forests, are treated as if they are public good s, but in reality are complex mixtures of private goods, local public goods and global public goods. The approach to the provision and prote ction of these goods has tended to focus on the development of interna tional agreements, such as those at the pie de Janeiro 'Earth Summit' in 1992. But do these agreements contain the relevant incentives to co nserve the global commons? Much depends on one's view of human nature. The Scottish economic tradition suggests that unless incentives focus on 'self love', as postulated by Hume and Smith, improvements will, a t best, be marginal. A richer array of policy measures is obtained by analysing the potential for 'global bargains', trades that improve the environment whilst making each parry better off. The souls of Hume an d Smith surely approve recent developments in practical global bargain s.