Trade and Environment: A Resource Book

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Among these countries is China and India which are the most emerging economies in the world with intensive growth in the manufacturing sector. As the scale of economic activities continues to increase, technological transfer to developing economies is also increasing thus contributing to growth in exports in most of these economies.

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Competition is one of the factors that have contributed to environmental degradation in most of the countries. There are those economies for instance, the developed economies with strong environmental standards while others, for instance, the less developed economies with poor environmental standards to sustain international trade. However, the compliance costs to these environmental standards vary because of the economies of scale which is high in the developed economies.

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  4. Table 1: Some of the determinants of environmental degradation from to Frankel and Rose, , p. Table 1 clearly shows how international trade has resulted into environmental impacts. As economies grow, the scale effects arise implying that the governments need to come up with initiatives for environmental protection.

    Issues of International Trade

    GATT for instance, has allowed countries to restrict trade so as to conserve exhaustible natural resources and also to protect plant, animal, and human life. Economists argue that there is a link between environmental concerns and trade barriers. For instance, the World Bank has estimated that a reduction of trade barriers especially in the developing economies translates into increased exports.

    This implies that the industries have to remain competitive so as to achieve a greater share in the market thus ignoring the environmental regulations so as to achieve this competitive advantage. However, some people argue that the international environmental regulations affect international trade in the sense that they limit export and imports according to the national regulation. As a result, the level of world output decreases. These impacts are more prone to the developing economies who are striving hard to achieve a competitive advantage in the market.

    Trade and Environment

    However, the developed economies such as the United States and Japan experience little impact on trade as a result of international environmental regulations. There are also those who argue that environmental regulations affect international trade. The combination effects according to OECD refers to the environmental effects occurring as a result of the growing relationship between products produced and consumed as an outcome of international trade.

    Trade and Environment Nexus

    C M Caroline Mutuku Author. Add to cart. Effects of Scale The effects of scale are those environmental impacts that have being linked with the changes in the scale of economic activities due to increase in international trade. The complexity of the subject becomes evident as the book leaves a host of questions unanswered. The authors limit their focus to local pollution caused by production of goods, while ignoring other significant environmental impacts of trade. If a car is manufactured in Japan and then shipped to the U. Some natural resources -- both local and imported -- would also be used up in manufacturing the car.

    What is International Environmental Law?

    There would be additional resource use and pollution from transporting the car to the U. Pollution from transportation and consumption of goods, as well as resource use throughout the life cycles of products, are all potentially major avenues through which global trade can damage the environment.

    When all these effects are combined with production-driven pollution, the final outcome could easily reverse the optimistic result that trade benefits the environment. The argument that polluting industries will stay in capital-rich developed countries also loses steam when capital itself is highly mobile. Low-paid workers in these countries work under hazardous conditions to salvage valuable materials from this fast-growing waste stream, while polluting the soil, air and water in the process. If this holds for most kinds of pollution and resource depletion, then incomes will have to increase by a factor of five to ten in large developing countries like China and India before there is sufficient local demand for environmental protection.

    Assuming that free trade can eventually deliver this income growth, a big unknown is whether it will result in income-induced policy changes before the cost of cleaning up the environment becomes prohibitively high. Equally troublesome is the issue of trans-boundary pollution such as greenhouse-gas emissions, where countries with widely different income levels will have to come together with a unified policy response.

    Export Impact For Good

    Between and , a period in which many domestic economies were turned inside out by globalization, annual carbon-dioxide emissions from worldwide fuel combustion increased by 50 percent. By , these emissions are projected to be 60 percent higher than in if no new policies are adopted. Power generation and transportation -- two sectors crucial to trade -- will account for three-quarters of this increase.

    A great deal of uncertainty remains about the long-term environmental impacts of globalization.