"An Internalization Based World Environmental Organization"

John Whalley
Universities of Warwick and Western Ontario, and NBER
and
Ben Zissimos
Centre for the Study of Globalisation and Regionalisation, University of Warwick

We evaluate the possibilities for a new World Environmental Organization (WEO), with our discussion motivated both by recent calls for such an organization in light of WTO trade and environment conflicts and the relative absence of internalization of global externalities. We propose an organization building upon the idea of facilitating Coasian deals on the global environment. We motivate the establishment of such an organization by itemizing the ways in which global environmental deals are presently restrained by various impediments, including free riding, property right ambiguities, and mechanisms for authentification and verification. We indicate how such a WEO might help in each of these areas, stressing the differences from the WTO which is a much narrower bargaining framework.