ENVIRONMENTAL POLICY
problems and higher CO 2 emissions), so increased trade leads to more envi-
ronmental destruction (see Chapter 12 ).
Free trade may also exacerbate economic inequities and environmental
damage. Ecological economists, such as Daly and Cobb ( 1990 :ch.11), argue
that the theory of free trade and comparative advantage is based on the
long-outdated assumption that goods are mobile but capital and labour
are relatively immobile – that they cannot cross borders. Today, one of
thefeatures of globalisation is that capital is highly mobile, and labour
is much more mobile too, as illustrated by the millions of migrant work-
ers in the developed world. Consequently, the specialisation of production
is likely to concentrate pollution in particular locations, typically in devel-
oping countries and regions, whilst the richer countries enjoy the benefits
of the goods whilst suffering only limited environmental damage. In the
developing world, production for export is generally heavily dependent on
theunsustainable use of natural resources (such as forestry, fishing, coffee
and palm oil plantations) or on mass production exploiting cheap labour
and low health and safety standards (Elliott 2004 :192; Clapp and Dauvergne
2005 :128–9). Indeed, the ‘pollution haven’ thesis suggests that free trade may
encourage a developing country to exploit a possible comparative advantage
byusing low environmental regulations as a kind of non-tariff subsidy to
encourage polluting industries to locate there (see Box10.1). Critics of free
trade therefore suggest that rather than encourage a ‘race to the top’ or
what Vogel ( 1995 ) calls ‘trading up’, it is more likely to provoke a ‘race to
thebottom’ to ‘lowest-common-denominator’ environmental standards (Esty
1994 ;Porter 1999 ;Elliott 2004 :193).Critical question 2
Are the core assumptions of the ‘trading-up’ argument sound?Between these two opposed positions there are many other perspectives in
thefree trade debate. Significantly, many observers, including those sympa-
thetic to free trade, recognise that the international system is out of bal-
ance, because those institutions responsible for governing trade (primarily
theWTO)are much more powerful than those protecting the environment,
so the interests of big corporations receive higher priority than environ-
mental protection or the concerns of local communities (Brack 2005 : 3).
The issue, therefore, is about how best to ‘manage’ trade to ensure it min-
imises environmental damage (Clapp and Dauvergne 2005 :132). Thus the
fiercely contested debate about the relationship between trade and the envi-
ronment has a practical outlet in the contemporary conflicts surrounding
theevolution of world trading agreements and institutions, notably the
WTO.