Globalization
Globalization and Environment
Theodore Panayotou CID Working Paper No. 53 July 2000 Environment and Development Paper No.1
Copyright 2000 Theodore Panayotou and the President and Fellows of Harvard College
Working Papers
Center for International Development at Harvard University
Globalization and Environment Theodore Panayotou Abstract Economic globalization impacts the environment and sustainable development in a wide variety of ways and through a multitude of channels. The purpose of this paper is (a) to identify the key links between globalization and environment; (b) to identify the major issues addressed in multilateral economic agreements in trade and finance that affect environmental sustainability; and (c) to review priority policy issues affecting the environment in multilateral economic agreements and environment, thus identifying incentives implicit in trade and investment policy measures that affect environmental sustainability. The author categorizes these issues under the primary areas of globalization: trade liberalization, investment and finance, and technology diffusion, the latter including intellectual property rights. In the case of the trade-environment interface, the paper examines the impact of both elements, and the causal relationship between them. It also pays special attention to multilateral environmental agreements and their potential effects on trade. An integrative section on the effects of globalization and environmental policy and performance leads to domestic and international priority policy issues and recommendations. The author concludes that globalization brings with it potentially large benefits as well as risks. The challenge is to manage the process of globalization in such a way that it promotes environmental sustainability and equitable human development. In short, the more integrated environmental and trade policies are, the more sustainable economic growth will be and the more globalization can be harnessed
Theodore Panayotou CID Working Paper No. 53 July 2000 Environment and Development Paper No.1
Copyright 2000 Theodore Panayotou and the President and Fellows of Harvard College
Working Papers
Center for International Development at Harvard University
Globalization and Environment Theodore Panayotou Abstract Economic globalization impacts the environment and sustainable development in a wide variety of ways and through a multitude of channels. The purpose of this paper is (a) to identify the key links between globalization and environment; (b) to identify the major issues addressed in multilateral economic agreements in trade and finance that affect environmental sustainability; and (c) to review priority policy issues affecting the environment in multilateral economic agreements and environment, thus identifying incentives implicit in trade and investment policy measures that affect environmental sustainability. The author categorizes these issues under the primary areas of globalization: trade liberalization, investment and finance, and technology diffusion, the latter including intellectual property rights. In the case of the trade-environment interface, the paper examines the impact of both elements, and the causal relationship between them. It also pays special attention to multilateral environmental agreements and their potential effects on trade. An integrative section on the effects of globalization and environmental policy and performance leads to domestic and international priority policy issues and recommendations. The author concludes that globalization brings with it potentially large benefits as well as risks. The challenge is to manage the process of globalization in such a way that it promotes environmental sustainability and equitable human development. In short, the more integrated environmental and trade policies are, the more sustainable economic growth will be and the more globalization can be harnessed
References: Adams, J. (1997). "Globalisation, trade, and environment." Globalization and Environment, OECD Proceedings, OECD: Paris. Alexander Grant and Company. Various years. Annual Study of General Manufacturing Climates of the Forty-Eight Contiguous States of America. Alexander Grant and Company: Chicago. Anderson, K. (1992). “Agricultural trade liberalization and the environment: A global perspective,” The World Economy 15(1): 153-71, January. Anderson, K. and A. Strutt (1994). “On measuring the environmental impacts of agricultural trade liberalization,” Center for International Economic Studies, Seminar paper 94-06, University of Adelaide: Adelaide. Archibugi, D. and J. Michie (1995). "The globalisation of technology: A new taxonomy," Cambridge Journal of Economics 19:121-140. Bhagwati, J. and T.N. Srinivasan (1997). "Trade and the environment: Does environmental diversity detract from the case for free trade?" in Bhagwati, J. and Hudec, R., (eds), Fair Trade and Harmonization: Prerequisites for Free Trade? Vol. 1: Economic Analysis MIT Press: Cambridge, MA. Clarke, T. (1998). “MAI-Day! The Corporate Rule Treaty: The Multilateral Agreement on Investments (MAI) seeks to consolidate global corporate rule,” http://www.nassist.com/mai/mai(2)x.html. Epping, M. (1986). "Tradition in transition: The emergence of new categories in plant location," Arkansas Business and Economic Review, 19(3):16-25. Esty, D.C. (1994). Greening the GATT, Trade, Environment, and the Future, Institute for International Economics: Washington, DC. Ewing, K.P. and R.G. Taresofsky, (1996). The "Trade and Environment" Agenda: Survey of Major Issues and Proposals form Marakesh to Singapore. IUCN Environmental Law Centre, Bonn, December. Gentry, B.S. et al (1996). Private Capital Flows and the Environment: Lessons from Latin America. Yale Center for Environmental Law and Policy (draft report). Grossman, G.M. and E. Helpman (1995). "Technology and trade." CEPR Discussion Paper 1134: London. Grossman, G.M. and A.B. Krueger (1993). "Environmental impacts of a North American Free Trade Agreement." In P. Garber (ed.) The US-Mexico Free Trade Agreement. MIT Press: Cambridge, MA, 13-56. 45 Grossman, G.M. and A. Krueger (1995). "Economic growth and the environment," Quarterly Journal of Economics 110(2): 353-77, May. Henriques, I. and P. Sadorsky (1996). "The determinants of an environmentally responsive firm: An empirical approach," Journal of Environmental Economics and Management, 30: 381-95. Hoffman, U. and D. Zivkovic (1992). "Demand growth for industrial raw materials and its determinants: An analysis for the period 1965-1988." UNCTAD Discussion Paper No. 5: Geneva. Johnstone, N. (1997) "Globalization, technology, and environment." Globalization and Environment, OECD Proceedings, OECD: Paris. Levinson, A. (1997). "Environmental regulations and industry location: International and domestic evidence," in in Bhagwati, J. and Hudec, R., (eds), Fair Trade and Harmonization: Prerequisites for Free Trade? Vol. 1: Economic Analysis MIT Press: Cambridge, MA. Low, P. (ed.) (1992). "Trade and the environment: A survey of the literature,", in Low, P. (ed.) International Trade and the Environment. World Bank Discussion paper 159, The World Bank: Washington DC. Low, P. and A. Yeats (1992)., "Do 'dirty ' industries migrate?" in Low, P. (ed.) International Trade and the Environment. World Bank Discussion paper 159, The World Bank: Washington DC. Lucas, R., P. Wheeler and H. Hettige (1992). "Economic development, environmental regulation and international migration of toxic pollution 1960-1988,: in Low, P. (ed.) International Trade and the Environment. World Bank Discussion paper 159, The World Bank: Washington DC. Lyne, J. (1990). "Service taxes, international site selection and the 'green ' movement dominate executives ' political focus." Site Selection, October. Nentjes, A. and D. Wiersma (1987). "Innovation and pollution control," International Journal of Social Economics, 17(4): 247-65. OECD (1995). Foreign direct Investment, Trade and Employment. OECD: Paris. OECD (1996). Globalizaiton of Industry: Overview and Sector Reports. OECD: Paris. OECD (1994a). The Environmental Effects of Trade, OECD: Paris. OECD (1997). Globalization and Environment, OECD Proceedings, OECD: Paris. Panayotou, T. (1997). "Demystifying the Environmental Kuznets Curve: Turning a Black Box into a Policy Tool." Environmental and Development Economics, 2(4): 465-484. 46 Panayotou, T. (1997). “Taking stock of trends in sustainable development since Rio.” In Finance for Sustainable Development: The Road Ahead: Proceedings of the Fourth Group Meeting on Financial Issues of Agenda 21, pp. 35-72, Santiago, Chile. United Nations, New York. Panayotou, T. and J.R. Vincent. (1997). “Environmental regulation and competitiveness.” Global Competitiveness Report, World Economic Forum: Geneva. Panayotou, T., T. Schatzki and Q. Limvorapitak. (1997). “Differential Industry Response to Formal and Informal Environmental Regulations in Newly Industrializing Economies: The Case of Thailand.” A Case Study for the HIID Asia Environmental Economics Policy Seminar. Pargal, S. and D. Wheeler (1995). "Informal regulation of industrial pollution in developing countries." World Bank Policy Research Working Paper 1416. World Bank: Washington, DC. Repetto, R. (1993). Trade and Environment Policies: Achieving Complemntarities and Avoiding Conflicts, World Resources Institute: Washington, DC. Repetto, R. (1995). Jobs, Competitiveness, and Environmental Regulation: What are the Real Issues? World Research Institute: Washington, DC, March. Robison, H.D. (1988). "Industrial pollution abatement: The impact on the balance of trade." Canadian Journal of Economics 21(1). Runnalls, (1998). “Shall we dance?” International Institute for Sustainable Development (IISD), Trade and Sustainable Development Research Guide, http://iisd1.iisd.ca/trade/dance.htm Schmenner, R. (1982). Making Business Location Decisions. Prentice-Hall: Englewood Cliffs, NJ. Smith, K. and J.A. Espinosa (1996). "Environmental and trade policies: Some methodological lessons" Environment and Development Economics: 19-40. Sprenger, R.U. (1992). Umweltschutz als Standortfaktor. Friedrich Erbert Stiftung: Bonn. Sprenger, R.U. (1997). "Globalization, employment and environment" Globalization and Environment, OECD Proceedings, OECD: Paris. Stafford, H.A. (1985). "Environmental protection and industrial location," Annals of the Association of American Geographers, 75(2):227-240. Strutt, A. and K. Anderson, (1998). "Will trade liberalization harm the environment? The case of Indonesia to 2020." Seminar Paper 98-04 Center for International Economic Studies, University of Adelaide, May. 47 Subramanian, A. (1992). "Trade measures for environment: A nearly empty box?" The World Economy, January, 15(1). United Nations (1996). World Economic and Social Survey, UN: New York. von Moltke, K. (1996). "International environmental management, trade regimes and sustainability." Paper prepared for the International Institute for Sustainable Development Winnipeg, Manitoba, Canada, January. Walter, I. (1973). "The pollution content of American trade," Western Economic Journal, 11:6170. Wheeler, D. and A. Mody (1992). "International investment location decisions: The case of US firms," Journal of International Economics, 33: 57-76. Wintner L. (1982). Urban Plant Siting, Conference Board: New York. World Bank (1997). Can the environment wait? Priorities for East Asia. World Resources Institute (1990). World Resources 1990-91, Oxford University Press: New York. World Resources Institute (1996). World Resources: A Guide to the Global Environment. WRI: Washington, DC. World Trade Organization (1995). International Trade Trends and Statistics, WTO: Geneva. World Trade Organization (1996). Trade and Foreign Direct Investment. WTO: Geneva. Young, J.E. and A. Sachs (1995). "Creating a sustainable materials economy," in L. Brown et al, (eds.) State of the World 1995. Earthscan: London. Zarsky, L. (1991). Trade-Environment Linkages and Ecologically Sustainable Development, Report to Department of Arts, Sports, Environment, Tourism and Territories, Environmental Strategy Branch, Australia, October. Zarsky, L. (1997). "Stuck in the mud? Nation-states, globalization, and environment." Globalization and Environment, OECD Proceedings, OECD: Paris. 48