On the shores of the Adriatic, economists and ecologists have come together to turn global policy-makers in a greener directionI while enjoying a little Chianti. Chris Bunting reports

A little knot of professors tumbles noisily from a freezing night into the lobby of the Adriatico Guesthouse in Trieste. Their evening has apparently been heavily lubricated with the delights of Italy's finest wines.

A cut-glass English accent peals across the ground floor. "Levin, I must say I thought your paper today was absolute rubbish," says Sir Partha Dasgupta, professor of economics and fellow of St John's College, Cambridge. "Utter nonsense."

"Professor Dasgupta, I am surprised you should say that. You've been lifting my work for years," retorts Simon A. Levin, professor of biology at Princeton University.

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"Now that is a joke!" interrupts Dasgupta, "I have taken some of your stuff and brought it up to the necessary standardI" Your correspondent, rushing to investigate, half expects to find the two academics rolling up their sleeves for fisticuffs in the entrance to the Adriatico. It is a bit of a disappointment, then, to find them smiling from ear to ear and engaging in a bout of Chianti-inspired back-slapping.

"That is a jokeI" Professor Dasgupta continues, launching into another stream of tongue-in-cheek invective against his colleague. This, it seems, is how two of the most respected figures in ecological and environmental economics prefer to express their admiration for each other: the more outrageous the slur, the more extravagant the implied compliment.

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Realising that they have attracted attention, Levin turns, with a suddenly serious face, to his gathering audience. "Now I want you to understand we are not insulting each other because he is an economist and I am an ecologist. Very far from it," he says, suddenly breaking back into a grin, "It is a purely personal thing." They are soon back at it, hammer and tongs.

When dogs meet in the local park, they warily sniff each other's tails.

When academic disciplines come together, the event can be similarly tense: as much about marking territory and establishing dominance as about exchanging ideas. So you would be forgiven for a certain amount of trepidation at the prospect of a month-long conference bringing together economics and ecology in the beautiful setting of the Abdus Salam International Centre for Theoretical Physics in Trieste.

In fact, while the professors bonded in their own inimitable style, the dominant mood in Trieste at the opening of the conference on February 10 was excitement. Economics and ecology have been cosying up to each other for years now. Environmental economics is an established subject in many western universities. But the conference at the Abdus Salam centre, set up in 1964 to help foster advanced scientific research in developing countries, was something new: dozens of economists and ecologists from the developing world participating in a programme that its organisers hope will revolutionise environmental economics and traditional development economics.

The problem, according to Dasgupta, one of the leaders of the effort, has been that old western-dominated approaches to environmental economics have treated the environment as a luxury: clean air and open spaces are valuable because they improve the quality of our lives. On the other hand, development economists working in the third world have often ignored environmental issues, perhaps because they are seen as rich people's luxuries. Dasgupta and others now champion a view that ecological resources are vital to the economies of third-world countries and that a detailed understanding of them is key to right-headed development.

In cooperation with the Beijer International Institute of Ecological Economics in Sweden, Dasgupta has been running a teaching and research programme for the young third-world ecologists and economists he sees as vital to researching ecological resources. A journal, Environment and Development Economics , publishes their work in a refereed journal alongside established western authors. The ecological and environmental economics programme at the Abdus Salam centre, bringing together academics from across the developing world in a three-year programme, represents the culmination of the effort and is likely to form the foundation for a permanent research institute on the shores of the Adriatic.

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Vikram Dayal, a 34-year-old PhD student at the Delhi School of Economics, is thrilled by the attention given to young researchers by leading academic figures: "It is remarkable because they are actually spending weeks of their time totally with us. You get to talk at meal times, it gives you great confidence."

But Dayal's research at the Ranthambore National Park in Rajastan, India, demonstrates the hard-headed rationale behind the initiative. His work on the difficult relationship between humans and tigers in Ranthambore has led to a close study of a quick-growing mesquite bush. The bush, introduced into the local environment to provide cheap firewood, has spread virulently across the margins of the park. Its sharp needles make it unsuitable for grazing, forcing local farmers to take their livestock into the national park and into conflict with the wildlife.

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"It is such a complicated picture - the economy is a part of the ecology and the ecology is part of the economy - that the research has to be done on the ground by local researchers. We have got to go back and convince people who make policies in our countries that they have to take account of the environment," Dayal says.

Eric Mungatana, a 33-year-old ecologist teaching at Moi University in Kenya, is in no doubt about the penalty if policy-makers do not listen:

"Poverty. When I was growing up, the economy in my village was based on fishing and growing rice, but 'development' in a part of Kenya hundreds of miles away, where they decided to build hydro-electric dams along the River Tana, has meant that the annual flooding of the river that people used to rely on has stopped. The people are a lot poorer and there are a lot of idle people because of this so-called development, but I am quite sure that the economic impact of drying out the river system was not properly understood when they took these decisions."

Mungatana studies the complex relationships surrounding the diminishing water quality of Lake Nukuru and the decline of a flamingo population on which its sizeable tourist industry is based. "One powerful relationship seems to be with the destruction of forest in an area called Menengai that seems to be affecting the flow of water into the lake. What you are seeing here is what you are seeing all over Africa: the unsustainable development of, in this case, forestry in one area will have totally unforeseen but potentially quite disastrous consequences for another part of the economy: the industry surrounding Lake Nukuru. The traditional economics has failed."

For the Nobel prizewinning economist Robert Solow, a keynote speaker on the first day of the programme and a self-admitted "old-fashioned" economist, the Trieste programme's effort to reach beyond the academic powerhouses of the West represents a tremendously exciting departure.

"We have to appreciate that this is not just about being fair to people but also about influencing what is happening on the ground: it is about building a network of people on the ground who are switched on to these ideas so that we can actually change things rather than just talk about it.

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"The close working relationship between economists and ecologists also seems to be genuinely working here. In the past, I have observed conversations between economists and ecologists where it was clear that what was really going on was one-upmanship. Talking to the people here in Trieste, there seems to be a real focus on getting on with changing the way we see the world: getting the economists out of their counting rooms and getting the ecologists dealing with economic realities."