Moreover, rising costs of compliance with environmental standards tend to affect most countries. It seems that firms have good reason not to transfer dirtier technologies to lower-income countries when they invest in these countries. Evidence from the wood pulp industry shows that the rate of clean technology adoption and diffusion is higher in open economies than in closed ones. A key issue in environmental economics is how best to protect the environment. The tradition of direct control has dominated environmental policy in industrial countries.
Regulation generally ensures more predictable outcomes.
It assures the public of the government's commitment to environmental quality. And it provides public authorities with discretionary authority over polluters. For these reasons, the shift to more economically efficient market interventions is likely to be gradual, even in countries with the highest environmental standards. In comparing environmental and trade regulations across countries, most economists assume that the capacities to absorb emissions and other concentrations of pollutants vary and that social priorities differ. These two propositions may seem obvious and unexceptionable to economists, who think in terms of scarcity, choice, and opportunity cost.