Globalization is a very broad word to define but as a result the world became more interconnected and open. Then the open markets started to grow, where countries with the right materials and skills are at a competitive advantage than others and their goods are relatively cheaper resulting in a higher demand and more exports. This lead the international trade being very popular and goods being transferred between countries all over the world via land, air and sea. After a while and when the global warming trend started emerging, people started worrying about the water, air, and forests in their own countries and their soundings.
As part of the global initiative of reducing the global warming effect, scientists are now concerned about the consequences of international trade on the environment. According to the U.S Environmental Protection Agency "Global warming is an average increase in the temperature of the atmosphere near the Earth's surface and in the troposphere, which can contribute to changes in global climate patterns. Global warming can occur from a variety of causes, both natural and human induced. In common usage, "global warming" often refers to the warming that can occur as a result of increased emissions of greenhouse gases from human activities."
In simpler words, the trade liberalization in the recent years had lead to a huge movement of goods around the world. Along with this came the advancement in technology and specifically in the means of transportation. Vessels, trucks and airplanes are now more advanced and can transport more goods faster than ever, and since there is no free lunch, all of this comes at a cost. The cost would be degradation and pollution of the environment in which they operate. Since no single country can tackle this environmental problem on their own and with the existence of the free riders, this situation needs to be addressed in a long term multilateral goals.
There are several aspects that determine the total emission from production in an economy, like the composition of products and the techniques used to produce them (Grossman and Krueger 1995). Also there is an obvious relationship between the size of the economy and the total emission, so the larger the economy the greater the emission, which means more pollution for the environment. As for the techniques, an economy with strict environmental rules will produce cleaner goods than others.
A related term in this case would be the Pollution Haven Hypothesis (PHH), which says that due to trade liberalization the dirty industries will move from countries with strict environmental policies to ones with lower standards (Ederington 2007). Another way of explaining the PHH is when the rich developed countries produce clean products while the poor ones are forced to produce the dirty products. This means that rich countries have strict environmental rules that force them to offshore dirty productions and just import those dirty products for consumption. Therefore the rich well developed countries will have cleaner manufactured products for exports and dirtier imports from capital abundant countries. This also reminds us of the "Race to the bottom" theory, which is also associated with dirty industries and the increasing damage on the environment.
In one way or another almost all industries are polluting the environment to a degree. The most polluting industries are iron, steel and metals, then chemicals, petroleum and paper. Those industries are ranked the highest in their usage of energy, labor and transportation pollution because of the heavy weights. In this paper, and since the damage of international trade on environment comes in different forms like air pollution, water pollution, killing living organisms and so on, there is so much to talk about but I will only address the air pollution issue.
Air Pollution
As a byproduct of production, chemicals are taking the majority of polluting elements. Sulphur Dioxide (SO2) is one important example of polluting chemicals. SO2 is very popular with very strong regional effects. It is the main chemical that contributes to acid rain, global climate change and air pollution (Grether el al 2009).
Pollution is the main end result of the international trade harmful effects. As mentioned before pollution comes in different shapes like acid rain, ozone layer holes, green house effects, smog and air pollution. Air pollution is the most common consequence, due to the heavy productions and means of transportation. This can affect plants, animals and humans as well. Air pollution usually is emitted from burning fuel for energy and comes out in the form of particles, in international trade this can be the result of burning fuel in manufacturers and also in trucks and airplanes while transporting the goods across countries. This is also called a "Black Carbon Pollution".
Poisonous gases are also another type of pollution like nitrogen oxides and carbon monoxide; they are usually the components of acid rain and smog. So when Nitrogen Oxides reacts with oxygen in the air, they form a brown gas with a bad smell. This happens in big cities with lots of traffic like for example in Los Angeles. Car makers at one point introduced the catalytic converters on the exhaust emission, but that didn't prevent the production of Nitrous Oxide which contributes to the global warming.
Also burning the fossil fuels like coal and oil in factories produces big amounts of Sulfur Oxides. This step has many implications on the surrounding environment like killing plants, smog covering industrial cities, damaging the health of the humans, and damaging the buildings stones and rust iron. Also in some cases the air pollution travels from the city center to the rural areas like the country side and does a lot of damages especially to the farmers and their crops. However it is not just the burning of fossil fuels that pollutes the air. Iron mills, paper mills, chemical plants, cement plants and petroleum refineries all release various chemicals in the air.
The combustion of fossil fuels from transportation is one of the main causes of air pollution. As a consequence air pollution the human health will be affected. However there are several reasons why transportation emits such huge amounts of polluting gases. Those reasons include the number of vehicles in an area, the age of the vehicle and the type of fuel used. Apart from the Sulpher Dioxide, ammonia, and nitrogen dioxide, international trade transportation also contributes to the green house effect. According to the United Nations Framework Convention on Climate Change the transportations sector produces 3 greenhouse which are: carbon dioxide, nitrous oxide and methane. 21% of the greenhouse effect is a result of transportation and is projected to increase in Latin America and Europe.
Airplanes are also a major player in the international trade after trucks and ships. Although transporting goods via airplanes are much more expensive than land or sea, but it is the fastest way. So like other transportation ways airplanes are no exception on polluting the air. According to researchers at MIT and Cambridge University, the aircrafts emit Nitrous Oxides and Sulpher Oxides which both combine and create gases that danger the human health. Such gases cause thousands of premature deaths around the world and especially in India and China where it is the worst. That is why the EU in 2012 and with emission trading system introduced the tradable carbon credits on all airlines flying over their airspace. (The Economist February 2012)
The dilemma
Until this day, the world cannot agree on whether international trade is beneficial or not. Most economists agree that expanding trade will lead to better wealth amongst trading countries, but at the same time scientists believe that trade causes a lot of environmental damage.
On one hand the supporters of international trade believe that liberalization of trade will help the world use its resources more efficiently and protectionism will intensify the environmental problems. However on the other hand, environmentalists believe that increasing world demand and trade liberalization is the cause of the problem. They argue that trade induced growth will worsen the earth's situation from fresh air and water to climate changes and natural disasters. Therefore in their opinion protectionism and additional trade barriers can help protect the environment. Several trade agreements are changing the way they address the environmental issues and encouraging governments to work together on better trade policies to protect the environment. Those agreements include the OECD, NAFTA, UNCED and WTO committees.
Immediate attention in needed from the managers in power, but for this to happen they have to have the adequate scientific knowledge about the issue and in details. Nevertheless the dilemma of the developing countries would still exist. Those countries primary goals are to increase income, economic growth, and make foreign exchange from the exports. So how would they maintain such growth without harming the environment more, since mostly they depend on dirty industry production for exports.
Pollution to some economists can be defined as an externality to some of the people, since specific people, firms or countries are polluting the environment and cost is borne to all other individuals around them. "Tragedy of the commons" can also be related to the pollution problem, where some countries are just depleting the environment and its natural resources without thinking of the overall costs in the future.
In order to tackle the pollution problem, we must first identify what are the dirty industries and where are they located. As mentioned before the dirty industries are usually in the developing poor countries with relaxed environmental regulations and most probably in the global south. However at the same time we can say that poor countries have a comparative advantage when it comes to dirty goods. Now for the rich countries, and according to Echevarria (2008), they go through structural change and a rise in income as they become richer. Along with this, rich countries will assumingly export cleaner goods than poor countries and at the same time try to import cleaner goods as well.
