26%20International%20Trade%20and%20the%20Environment

26%20International%20Trade%20and%20the%20Environment -...

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1 1 Trade and the Environment •In t rodu c t ion • Is Free Trade Anti-Environment? • Trade and the Environment • Is the WTO Anti-Environment? • Global Environmental Challenges 2 Introduction • Environmental issues are playing a growing role in disputes about international trade. – Some anti-globalization activists claims that growing international trade automatically harms the environment. – Other anti-globalization activists claims that international trade agreements have the effect of blocking environmental action. 3 Introduction • Is globalization bad for the environment? – Environmental standards in developing-country export industries are much lower than in advanced- country industries. – Substantial environmental damage has been and is being done in order to produce goods to advanced- country markets. 4 Introduction • Should trade agreements include environment- al standards? Proponents argue that such agreements can lead to at least modest improvements in the environment,
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2 5 Introduction • What does this have to do with international trade? – Trade liberalization is often advocated on the grounds that it will promote economic growth and raise per capita income. 6 Is Free Trade Anti-Environment? Trade liberalization has three effects that may impact the environment: 1. It will alter the composition of what is produced and consumed in each country, which may change the amounts of environmental damage. http://video.nytimes.com/video/2007/12/15/world/119 4817109300/the-world-s-fish- 7 Is Free Trade Anti-Environment? Trade liberalization has three effects that may impact the environment: 2. It will increase the size of the economy, leading to more environmental damage, other things being equal. 8 Is Free Trade Anti-Environment? Trade liberalization has three effects that may impact the environment: 3. It will increase the income of the country, leading to less environmental damage, other things being equal.
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3 9 Introduction If trade liberalization: 1. Alters the composition of output, 2. Increases the size of the economy, and 3. Increases the income of the country, Will this improve or worsen environmental quality? 10 Environmental Kuznets Curve 11 Is Free Trade Anti-Environment? • One fear of environmentalist is that free trade permits production to be shifted to countries that have lax environmental standards. – Exports from these
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This note was uploaded on 02/09/2011 for the course ECON 181 taught by Professor Kasa during the Fall '07 term at University of California, Berkeley.

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26%20International%20Trade%20and%20the%20Environment -...

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