Income and the Environment

But the environmentalists also argue that, especially when it comesto

specific pollutants and environmental harms, growing incomes (and
hencethe global trade and investment that contribute to them) will bQ
associatedwith deteriorating environmental outcomes. The other argu,
ment is that global trade with and investment in countries with lower
environmental standards are tantamount to unfair competition and
\\ ill destroy our industries, which are subject to higher standards. Alten
natively, they will lead, as the unions fear for labor standards (a fear
discussedand discounted in the preceding chapter), to a race to the bot,
tom, destroying the higher standards with a view to ensuring competi,
tiveness with lower-standard rivals.
Thebeliefthat specific pollutants, such as sulfur dioxide, resulting
from increasedeconomic activity will rise in urban areas as per capita
incomeincreasesdepends on two assumptions: that all activities expand
uniformly and that pollution per unit output in an activity will not di.
minish. But neither assumption is realistic.
As income rises, activities that cause more pollution may contractand
thosethat causelesspollution may expand, so the sulfur dioxide concen~
tration may fall instead of rise. In fact, as development occurs, economies
typically shift from primary production, which is often pollution~
intensive, to manufactures, which are often less so, and then to traded
services,which are currently even less pollutionintensive. This natural
evolution itself could then reduce the pollution-intensity of incomeas
developmentproceeds.
Thenagain,the available technology used, and technologynewly
invented, may become more environment-friendly over time. Both
phenomena constitute an ongoing, observed process. The shiftto
environment-friendly technology can occur as
naturally households, for
example,become less poor and shift away from indoor cooking with
smoke-causing coalbased fires to stoves using fuels that causelittle
Butthis shift is often a result also of environment-friendlytech-
smoke.l9
innovation
nological prompted by regulation. Thus, restrictions
on al-
fuelefficiencyhavepromoted researchby the carhrmstoproduc
lowable
that
engines yield more miles per gallon. But these are
regulations cre-
atedby increased
environmental consciousness,for which theenviron
mentalgroupscantakecredit.And the rise of theseenvironmentalgroup
is,in turn, associated
with increased incomes.
Also,revelationsabout the astonishing environmentaldegradatio
in theSovietUnion and its satellitesunderline how the absence
of demo
craticfeedback
andcontrolsis a surefirerecipefor environmental
neglec

r'Iraw r-