The costs and logistics of complying with environmental regulations are not a decisive factor in most industrial decisions about desirable plant locations or in the international competitive picture of most major industries. Industrial flight from regulations has not become a significant enough phenomenon to diminish the comparative advantage of the advanced industrial powers. There is no evidence that pollution havens are enhancing their comparative advantage in industrial production by luring whole industries away from the United States and other countries with strict environmental standards. Nor is there any reason to believe that the major trend in international industrial comparative advantage – the gradual shift of many heavy industries such as steel from the most industrialized to rapidly industrializing countries – is being significantly heightened by stringent environmental regulations in the most advanced countries.

Such conclusions do not necessarily prove that environmental factors never influence international industrial-siting decisions or the evolution of comparative advantage in certain industries. They do indicate that the differentials in the costs of complying with environmental regulations and in the levels of environmental concern in industrialized and industrializing countries have not been strong enough to offset larger political and economic forces shaping aggregate international comparative advantage. An interesting and important question is whether in “normal” times, if political and economic turmoil and barriers to trade were lessened, pollution-control expenses and other environmental factors would become more important in the choices made by countries about industrial specialization and the choices made by corporations about location.