In this paper we employ a common agency model to study the role of green and producer lobbies in the determination of trade and environmental policies. We focus on two large countries that are linked by trade ‡ows and transboundary pollution externalities. We show that the nature of the relationship between lobbies and the relative e¢ciency of unilateral and cooperative policy outcomes depend crucially on three factors: the type of policy regime, whether governments act unilaterally or cooperatively, and the extent of the ‘pollution leakages’.