Introduction to Environmental Issues and the Impact of Globalization on the Environment By:Jaspreet Singh (51) Puneet Jonathan Singh

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 Causes of soil pollution:- Toxic heavy metal deposits - Sewage sludge - Domestic wastes - Pesticides and fertilizers used excessively

Responsibility of Ozone layer depletion

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Effects of UV rays on Aquatic Ecosystems

Ozone depletion causes increases in UV rays effects on aquatic ecosystems by:

1. decreasing the abundance of phytoplankton affects the food stock for fishes and the absorption of CO2 2. decreasing the diversity of aquatic organisms reduces food stock and also destroys several fish and amphibians. Effects of UV rays on Terrestrial Ecosystems Damage to plant cell DNA molecules - makes plants more susceptible to pathogens and pests Reductions in photosynthetic capacity in the plant - results in slower growth and smaller leaves Causes mutations in mammalian cells and destroys membranes

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Harmful effects of UV rays on people - Skin cancer - Premature aging (photo aging) of the skin (different from normal chronological aging) - Cataracts and eye disorders (corneal sunburn and blindness) Immune system damage

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Central questions
Is globalization good or bad for the environment? Does globalization help or hurt in achieving the best tradeoff between environmental and economic goals?
Do international trade & investment allow countries to achieve more economic growth for any given level of environmental quality? Or do they damage environmental quality for any given rate of economic growth?

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Symmetric fears
Free traders fear that talk of environmental protection will be used as an excuse by some industries to gain protection for themselves against competition from abroad. Environmentalists fear that talk of free trade will be used as an excuse to give inadequate weight to environmental goals and excessive weight to GDP.
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Is growth per se good or bad for the environment? Environmental damage

I e u lity nq a
e ., a ma u e b .g s e s r d y G i c e fic n in o f ie t

I cm no e

/c p a ita

Environmental Kuznets Curve:

Grossman and Krueger (1995)

Economic growth (whether trade-led or not) is good for the environment above a peak level of income.
.

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Is trade itself good or bad for the environment, in theory?

Environmental effects of trade Harmful effects via growth in income:
Environmental K.Curve

for a given level of income : Race to the bottom in national regulation Gains from trade: ratcheting up standards, consumer power, innovation
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larger scale of economic activity

Beneficial effects shifts to cleaner techniques and composition of economic activity

The impossible trinity of global environmental regulation

Protectionism

National sovereignty

RACE
TO THE

Environmental standards

BOTTOM

Unregulated emissions

Globalization

Multilateral governance

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Some examples of trade helping environment

Imports of environmentally friendly products
(fuel-efficient autos, sugar-based ethanol)

Trade brings technological innovation, which can, for example, save energy. MNCs bring global standards to where the local alternative is
environmentally less friendly. Multilateral agreements Potential for trade sanctions, as in Montreal Protocol on ozone depletion Kyoto Protocol
International trade in emissions permits: a win-win feature Russia ratified as quid pro quo for EU supporting its WTO accession.
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Which tend to dominate in practice:

The effects of trade that are detrimental to the environment (e.g., race to the bottom)?

Or the effects of trade that are beneficial (e.g., US imports of fuel-efficient autos)? It depends on what measure of environmental quality is at stake.

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CO2 emissions/cap tend, if anything, to rise with openness

30 25 20 15 10
t a r e p n o s i m E 2 O C

5 0 0 100 200
Trade Openness
20

300

400

But these rough correlations tell us little.

To isolate the effect of trade on a countrys environment, we need to control for other determinants, such as
income democracy population density.

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Is trade itself good or bad for the environment, statistically?

Environmental via growth in income: effects of trade for a given level of income:

for SO2
concentrations

EKC: after an income of about The favorable $5,700/cap., further growth effects of trade tends to reduce pollution seem to dominate (via national regulation) No sign that total emissions turn Trade may also down. increase (CO2 is a global externality: little emissions even for a given level of regulation is possible at the income national level.)
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for CO2
emissions / capita

Economic/environmental win-win examples

Remove barriers to imports of environmental goods
US ended restrictive 80s tariffs & quotas on Japanese auto imports, benefiting both consumer pocketbook & air quality USG proposal for Doha round: liberalize capital equipment and services used in environmental sector US could let in imports of Brazils sugar/ethanol, again hitting all 3 goals.

A global ban on subsidies to fossil fuels

would achieve both enviro goal of reducing carbon emissions and economists goals of reducing deficit spending & an economic distortion.

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