Chapter 13 Trade and the Environment
Is Free Trade Anti-Environment?
Is globalization anti-environment?
Link to syllabus
David Malthus, 1766-1834
1798 Essay on the Principle
of Population
Overpopulation; economics
as “the dismal science”
Improved living standards (from
industrial revolution) will lead to
population growth, which will nullify
previous increase in income/capita
Why was he wrong? a)Ignored possibility
of continuous technological progress;
b) New ag lands in western hemisphere
c) Demographic theory was wrong
Club of Rome:
“Limits to
Growth”
1970’s
“Neo-Malthusians:”
limited resources
and
environmental
problems
Figure 13.1 page 286
Environmental problems by income level
Smoke particles from
Fireplace in a hut
Carbon dioxide
from cars, urban
waste
Sulfur dioxide
And lead
Complicates analysis of effect of income on the environment
Environmental Pollution
Types of Environmental Degradation
Small particles (sandstorms, smoke, small industry)
Industrial Pollution (chemicals and smoke)
Urban air & water (urban waste, ozone, and auto exhaust)
Water (from dams, fertilizer)
Deforestation/desertification
Global warming, (cities affected by rising seas)
Government policy:
Pollution controls (local, national, international - Kyoto accord
Investment in infrastructure for sewage, potable water, roads, etc.
Location of industries
Enforcement
Environmental Indicators, in per capita terms.
10.0
4.0
Lebanon
United States
50.0
5.0
10.
0
Qatar
Saudi Arabia
http://www.footprintnetwork.org
7.0
7.0
Germany
7.0
United Kingdom
2.5
Russia
China
http://www.footprintnetwork.org
2.0
10
U.A.E.
Egypt
3.5
3.0
Turkey
Iran
Figure 13.2 page 287
Environmental effects of the Uruguay Round
Table seems to say that effect of the Uruguay round was small.
Figure 13.3 page 294
Types of Externalities and Product Prescriptions.
Figure 13.4 page 296
When domestic production causes domestic pollution
Country can be better
off taxing domestic
production, and importing,
because a is less than b,
and social cost is assumed
(0.30) to be larger than the
differential to world price.
Figure 13.5 page 299
Classic case of international pollution, & the ideal solution
Figure 13.6 page 312
Carbon Tax to Stabilize Atmospheric Carbon Dioxide
Source: IMF World Economic Outlook, 2008