Environmental Effects of International Trade hks国际贸易的环境效应HKS.harvard.pptxVIP

1 Trade, Growth,and the Environment Jeffrey Frankel Guest lecture: Rob Stavins class inEnvironmental Resource Economics and Policy April 27, 2015 2 A prequel: The anti-globalization movement In 1999, protestors at the Seattle WTO Ministerial meeting launched the first of the big anti-globalization demonstrations. Some wore turtle costumes.  Why? They felt that a WTO panel had, in the name of free trade, negated the ability of the US to protect sea turtles in the Indian ocean, as the GATT had done in the 1992 tuna-dolphin case. 3 Central questions Is trade good or bad for the environment? Does globalization help or hurt,in achieving the best tradeoff between environmental and economic goals? Do international trade investment allow countries to achieve more economic growth for any given level of environmental quality? Or do they damage environmental quality for any given rate of economic growth? Do the WTO environment conflict? e.g., could trade measures enforce a climate agreement? How can globalization best be harnessed? 4 Symmetric fears Free traders fear that environmental protection will be used as an excuse by some industries to gain protection for themselves against competition from abroad.  Environmentalists fear that free trade will be used as an excuse to give inadequate weight to environmental goals, and excessive weight to GDP. 5 Widely agreed: openness to trade other international activity is good for economic growth In theory: classical comparative advantage (e.g., Ricardo) modern theories of trade based on imperfect competition (e.g., Krugman). Empirically: many econometric studies. E.g., one estimate: every .01 increase in a country’s trade/GDP ratio raises income 3 ? % (over next 20 yrs.). 6 But what about effects of opennesson environmental quality,which is not capturedin GDP statistics? 7 We care about both environmental quality and (market-reflected) real income. Income per capita → The objective,