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Globalization performs a small function in environmental issues


Globalization performs a small function in environmental issues


It is inevitable that prices do not always take into account all of the costs and benefits for everyone involved in a transaction. Externalities can come in good and bad forms. However, the most frequently discussed externalities are those associated with environmental damage.

Of course, globalization has an environmental impact, but it’s mixed and, in general, far less scary than many people think. Most ecological problems are still more local than global in nature, and while cross-border integration can pollute the environment in some places, it can also help clean up.

As the pressure to reduce CO2 emissions increases, the logistics of cross-border trade is often cited as an unnecessary cause. With dark green tinted glasses, many are calling for a return to exclusively locally grown or manufactured products. But let’s be honest: consumer demand and expectations have changed a lot since the days of zero-border trade. Since a collective global vow of poverty is unlikely to be taken in the foreseeable future, it would do more harm to the environment than good to meet modern requirements without cross-border trade. In 2007, for example, the British supermarket chain Tesco decided to ban imports of roses from Kenya in order to reduce emissions. However, research found that the Dutch roses she relied on produced six times as much greenhouse gas, largely because they were literally grown in greenhouses.

And how much of the energy-related greenhouse gas emissions do you think international traffic really causes? Since most of the goods traded internationally are transported by sea, shipping should be the first port of call. According to estimates (PDF), international shipping causes 2-3% of energy-related CO2 emissions (PDF). This may come as a surprise when you think of the long distances ships travel to carry cargo. But a cargo ship emits only 15-21 g of CO2 per tonne-kilometer, compared to a truck of 50 g (PDF). Transporting goods over long distances across the ocean may therefore prove less harmful than transporting goods over shorter distances over land.

Of course, goods (and people) also often travel by air, so we should consider the estimated 1-2% of energy-related CO2 emissions caused by international aviation (part of the estimated 3% contribution to human-induced climate change (PDF )). This is a fraction of the over 20% estimated by the general public, and traffic-related emissions from international aviation are a tenth of those from (mostly domestic) driving. Transportation to facilitate international trade harms the environment, but it pales in comparison to the damage done domestically.

So far I have focused on the direct environmental impacts from increased cross-border flows, but what about possible indirect effects? While these effects do exist, they are a mix of positive and negative and need to be weighed for a realistic perspective. An example of an indirect compositional effect that economists tend to be concerned about is the migration of dirty industries to (generally) less developed countries with more lax regulations. A recent study (PDF) found that in low-income countries, more trade is associated with higher per capita energy consumption, while the opposite is true for high-income countries. This fits in with the idea that imports into rich countries are more polluting than their exports. But in such a comprehensive analysis, details are not taken into account.

As different countries apply different rules with different levels of rigor, some differences in energy consumption can be expected. However, there is also evidence that Foreign Direct Investment (FDI) can actually help encourage the adoption of cleaner methods of production. To maintain consistency between plants (and avoid negative advertising), foreign companies often bring in new technology and implement higher environmental standards than local companies. Specifically, Germany’s high green standards have even spilled over to China in some cases, where some exporting companies have started to meet German requirements even for their domestic products.

The direct and indirect effects of globalization on the environment are less pronounced than many think, but that does not mean that globalization can be ignored in the search for solutions to real environmental problems. Paying attention to distance sensitivity, which is critical to properly understanding the levels and patterns of globalization, provides a useful guide to using environmental solutions. Local solutions are appropriate for removal-sensitive pollutants that remain more or less within the limits. But for pollutants that span regions, cross-border cooperation can be critical to any cleanup attempt. For example, the US-Canada collaboration (specifically the 1991 US-Canada Air Quality Agreement) has helped reduce North American sulfur dioxide emissions by about two-thirds since 1980, which goes a long way toward solving the acid rain problem in them Region.

Due to its (unusual) insensitivity to distance, climate change is by far the most difficult environmental externality to combat. So to tackle it, we need more, not less, international cooperation. Obviously, given the variety of cross-border distances and the differences between all the nations that make up the world, such collaboration must be both complex and innovative. The failure of the 2009 Copenhagen Conference of the Parties to reach a binding agreement on greenhouse gas reduction targets shows that it is not so easy to put a number of executives in one room and get them to one Create plan.

In contrast to many of the supposed failures and fears associated with increasing global integration, globalization has played a role in the case of the environment. It was a bit of a part, as opposed to a lead role, however. And it should be weighed against the benefits of cross-border integration for a more balanced perspective. This does not mean, of course, that the global strategy should ignore external environmental effects. On the contrary, integration should be used as a tool to deal with externalities affecting more than one country and to share knowledge on greener techniques with localized effects. And given the limited capacity for truly global action, it is useful to recognize that only the most remote environmental externalities, such as climate change, require full global coordination.


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