Globalisation, trade and the environmenton manufactured goods have fallen from about 50 per cent in 1948 to an
average of3.7 per cent today (Brack 2005 : 2).
The relationship between trade and the environment is as fiercely con-
tested as the globalisation debate; indeed, many of the arguments overlap.^3
Thus one core argument behind the claim that trade is positive for the
environment is the neo-liberal thesis that free trade contributes to eco-
nomic growth, which generates the wealth necessary to fund environmental
improvements. Of course, market liberals make a brave and perhaps overly
optimistic assumption that firms will spend their extra wealth on greener
technologies such as pollution abatement equipment, rather than just tak-
ing it as profit, although it is likely that as incomes rise citizens will demand
higher environmental standards. Proponents of free trade argue that it has
other environmental benefits; in particular, that it allocates resources more
efficiently than any other system, which results in lower usage and there-
fore fewer wasted resources (Clapp and Dauvergne 2005 :123–7). It does so,
first, by the specialisation of production based on the economic theory of
comparative advantage, whereby countries specialise in those products that
theyare better at producing, which is more efficient than pursuing national
self-sufficiency in a wide range of goods. Secondly, free trade removes trade
restrictions that distort markets, such as tariffs, quotas and export subsi-
dies, because such protectionism reduces the incentive to develop greener
technologies and encourages over-consumption by underpricing goods on
the domestic market. Another argument for free trade, which also informs
theecological modernisation perspective (Mol 2003 ), is the claim that coun-
tries will adopt the higher environmental standards of richer countries to
enable their businesses to compete in those lucrative markets. Vogel ( 1995 )
provides several examples showing how the lure of green markets in the
USA and EU has encouraged developing countries to raise their standards,
particularly in the automobile industry (see Chapter 12 ).
Many environmentalists, however, have deep reservations about the pro-
claimed advantages of global free trade. A basic problem lies with the contri-
bution of trade to economic growth. Even if the market liberals are correct
that free trade makes production more ‘efficient’, any resulting benefits
in terms of lower resource use will rapidly be overshadowed by the over-
all growth in the economic activity encouraged by free trade. For example,
steady improvements in the fuel efficiency of aircraft have been outstripped
by the dramatic growth inairpassengertraffic(IPCC 1999 ). Indeed, more
trade means more pollution simply from transporting more finished and
partially completed goods around the globe. Moreover, if efficiency gains
result in falling prices for a particular good, then greater demand for
those goods will lead to increased consumption (Clapp and Dauvergne 2005 :
127–8). Free trade also fails to take account of the external environmen-
tal costs of economic activity: the price a consumer pays for a good does
not include the full value of the natural resource (e.g. its irreplaceability)
or of the transportation costs (e.g. costs to society of addressing pollution