Does International trade affect international environmental regulation? Ravishankar started the conversation with this question. The view varies from the perspective of the pro environmental group to the pro economic group. 30 years ago, it is easy to say that everyone in the international setting is more of a pro economic perspective. They believe that once the global trade system is build up, the environmental regulations will be built in alongside. This however, does not seem to be the case.
The global trade market has developed with little care of environment. Since the 70’s, trade agreement between two countries often is based on economy. Two groups try to improve their consumption by trading excess goods to those that need, a simple supply and demand model. Environmental similar to social issues are often externalities in trade agreements.
Remember the apple factories in China? Or the sweatshops in India? Social issues have been on the news. Workers in Mexico going on strike for better wage causing domino effects on the value of goods in the US. Social injustice in India being a risk priority for many companies. Only recently has environmental issues becoming more direct in global trade.
So it seems trade and environment is following the Kuznets Curve. The US CO2 reach a current maximum in 2008. There are many other factors that may cause this decrease in CO2 emission. One potential reason is due to the decrease in consumption from the US and global recession. Similar curve can be mapped for almost all developed countries (Japan, Netherland, England, and Germany to name a few top trade partners in the world). The only exception is China.
Ravishankar’s work on the North American Free Trade Agreement (NAFTA) and how it affects the environment specifically targets the connection between trade and environment. Based on research data on trade, it seems that NAFTA has little association to any environmental regulations. Trade between the countries grew dramatically in the 15ish years of NAFTA. But Energy consumption as well as pollutions and CO2 emission does not correlate with trade.
The bottom line seems that air pollution is directly linked to development and productivity and trade increase development and productivity. Ravishankar suggest that new trade agreements should include environmental policies and regulations.
Ravishankar Jayadevappa PhD. is from University of Pennsylvania in the School of Medicine