Globalisation And Environment

People argue that globalisation increases demand for natural resources that are integral to the ecological systems that sustain life on the planet…Glob creates incentives for excessive use of resources and disregard for their true ecological value, resulting in problems like increased greenhouse emissions and deforestation. The process undermines traditional values and attitudes that have helped preserve the natural environment throughout history, and propagates an increasingly consumerist culture.

Does globalisation increase environmental degradation?

Does trade liberalisation necessarily harm the environment?

Does investment liberalisation necessarily harm the environment?

Does globalisation necessarily shift polluting industries and environmental degradation from rich to poor countries?

Or is it just an effect of population and economic growth? Last century saw a massive expansion in agriculture and industry, together with large increase in global population. Early economic development focused primarily on modern agricultural production. This resulted in deforestation and destruction of biodiversity, as well as environmental pollution. The next phase, of industrialisation, used energy intensively, rapidly extracted natural resources, and emitted larger quantities of more toxic pollutants. Throughout both phases, populations continue to grow rapidly, increasing demand for land, goods and services.

Some argue that demand side growth effects can benefit the environment. As incomes rise, demand for environmental quality may increase, and people may become increasingly able to purchase environmentally cleaner products.

Assume there were no changes in the structure of an economy and the technology of production. So as an economy grew, there would be a proportional increase in environmental degradation, such as pollution. The argument that economic growth and environmental quality are inherently at odds is often based on this scale effect. Yet, history suggests that growth is often accompanied by structural change also, not just scale.

As economies grow, newer industries may emerge. Different industries generate different pollution. These days, in many developed economies, service industries are replacing smokestack industries, and pollution is decreasing in a structural sense. Comparative advantage will determine which industries will expand and which will contract.

Improvements in technology can improve efficiency, and result in less pollution per unit of output. If preferences for lower levels of pollution emerge, either through the marketplace or through political systems and regulation,

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