Environmental Engineering Reference
In-Depth Information
7
Globalization and the environment: convergence
or divergence?
James K. Boyce
*
Introduction
In the early 1990s, the environmental movement in the USA underwent an acrimonious
split over whether to support the proposed North American Free Trade Agreement
(NAFTA). Some groups backed the treaty, agreeing that 'the best way to ensure that
Mexico's environment is cleaned up is to help Mexico become a prosperous country, and
that means NAFTA'.
1
Others opposed it, arguing that 'the competition to attract invest-
ment will result in a lowest common denominator for environmental statutes' and that 'the
country with the least restrictive statutes will become the
fl
oor, and others will harmonize
downward to that
fl
oor'.
2
erences, both sides made a common assumption: Mexico's environ-
mental practices were inferior to those of the USA and Canada. The only point of con-
tention was whether free trade would pull the USA and Canada down to Mexico's level,
or lift Mexico to the plane of its northern neighbors. Partly as a result, both sides were
oblivious to what may turn out to be NAFTA's most serious environmental impact: the
erosion of Mexico's rich biological diversity in maize ('corn' in US parlance), as Mexican
campesino
farmers abandon traditional agriculture in the face of competition from cheap
corn imported from the USA.
3
In this chapter, I question the assumption that the global North is relatively 'green' and
the global South relatively 'brown'. I also argue that neither theoretical reasoning nor
empirical evidence supports the axiomatic claims that 'globalization' will promote a con-
vergence toward better environmental practices, or toward worse environmental practices,
or instead a growing divergence in environmental practices across countries.
Despite their di
ff
Environmental convergence: four scenarios
In debates on North-South trade, it is often assumed that production processes in the
global South tend to be more environmentally degrading than those in the global North,
by virtue of weaker demand for environmental quality (ascribed to low incomes), the
weaker ability of governments to promulgate and enforce environmental regulations, or
both. Hence trade occurs on a tilted playing
eld, where southern producers have a com-
petitive advantage over their Northern counterparts thanks to their greater scope for
externalization of costs.
Economic theory is often invoked to maintain that a level playing
fi
fi
eld - one with no
international di
erences in environmental standards - is not necessarily optimal: the mar-
ginal costs and bene
ff
ts of environmental quality are likely to vary across locations.
4
Two
points should be noted in this connection. First, this does not imply that existing variations
in standards across countries are optimal, nor that moves toward greater harmonization
would not be welfare improving in conventional terms. Second, international di
fi
ff
erences in
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