Environmental Engineering Reference
In-Depth Information
world exports.
11
This relocation of 'dirty industries' - a policy infamously recommended
by the World Bank's chief economist in the early 1990s (
The Economist
, 1992) - occurs
mainly via net additions to the capital stock, given sunk costs in existing Northern
facilities.
Even if there were robust evidence that dirty industries are migrating from North to
South, this would not automatically put downward pressure on environmental standards
in the North, as envisaged in the strong variant of the race-to-the-bottom logic. It is con-
ceivable that instead northern countries would allow, or even encourage, the displacement
of environmental costs to the South, with international trade allowing them to import raw
materials, intermediate inputs, and
nal products at prices held down by cost external-
ization.
12
In other words, the North could maintain higher environmental standards
domestically, while reaping 'ecological subsidies' from the South, a possibility to which I
return below.
fi
Greening the North
I now turn to scenarios where the environmental-quality gradient runs from South to
North - that is, where southern production is cleaner and more sustainable than compet-
ing production in the North. At
rst blush this may seem implausible, given the deeply
ingrained assumption that environmental quality is a luxury that only the a
fi
uent can
a
ord, or at least a normal good for which demand rises with income. Indeed, it is often
assumed that the 'bottom billion' - the world's poorest people - 'cause a disproportion-
ate share of environmental degradation' (Myers, 1993, p. 23).
This demand-driven model neglects the supply side of environmental quality. We know
that the global North's share of world income - and hence of world production and con-
sumption - far exceeds that of the global South. In the year 2000, those countries with
the richest 20 percent of the world's population, in terms of per capita incomes, accounted
for 67 times as much income as the countries with the poorest 20 percent. The ratio
narrows when computed on the basis of purchasing-power parity (PPP), but even then
the average income of the richest quintile exceeded that of the poorest quintile by a ratio
of 16 to 1 (Sutcli
ff
e, 2003, p. 10).
Environmental degradation per unit of income may vary across countries or income
classes. If degradation were su
ff
ciently concave in income, the poorest quintile in theory
could generate more environmental degradation than the richest quintile. But merely to
equal
the degradation generated by the top quintile, the environmental degradation per
unit of PPP-adjusted income in the bottom quintile would have to be 16 times greater.
Such a disparity seems improbable. In some respects, at least, environmental degradation
per unit of income may even be greater for the rich. Contrast, for example, the pollution
generated by automobiles compared to bicycles, the amount of non-renewable resources
used to produce a bushel of grain in the USA compared to India, or the pollution gener-
ated in the production and disposal of synthetic as opposed to natural
bers.
If there is indeed a gradient along which certain aspects of environmental quality are
better in the South than in the North, then an optimistic view of globalization is that it
will promote the 'greening of the North' (Sachs et al., 1998). This is akin to the ecologi-
cal modernization school of thought in that it emphasizes possibilities for harmoniza-
tion upward, but with the di
fi
ff
erence that it reverses the relative positions of North and
South.
