The desiccation of the Aral Sea was oneof the greatest environmental disasters of the latter partof the twentieth century. In 1960, it was the fourth largestlake in the world. However, since 1965, the sea has lostseventy five percent of its volume and the coastline hasadvanced hundred kilometers. The sea is now divided into twosections and if desiccation continues, it will eventuallydevolve into a string of isolated salt lakes. The desire ofthe former Soviet Union for self-sufficiency in cotton ledto massive expansion of cotton production in Central Asia,mostly in Uzbekistan, and to the use of irrigated water fromrivers that normally fed the Aral Sea. Could theenvironmental disaster have been avoided if the formerSoviet Union had relied more on imported cotton and notdiverted these rivers? Can we conclude that if the cost ofthe irrigated water had been properly considered, Uzbekistandid not have a comparative advantage in cotton production,and the Soviet Union should have imported the cotton? Or areother explanations more important in explaining theenvironmental disaster?. The authors consider thesequestions in this case study, but begin with an elaborationof the environmental problems.