NCPA - National Center for Policy Analysis

STRONGER ECONOMIES CAN AFFORD CLEANER ENVIRONMENTS

January 26, 2005

Environmentalism is a laudable, but expensive luxury affordable only by those nations that can already provide food, shelter and security for their citizens, says Pete Geddes of the Foundation for Research on Economics and the Environment (FREE).

While liberals believe globalization is a source of pollution and worker exploitation, the overwhelming consensus among economists is that the quickest way to boost living standards and improve environmental quality is through freer trade. For example:

  • Mexico City's notoriously dirty air is improving, with regulations that have significantly reduced the levels of lead, carbon dioxide and sulfur dioxide.
  • Today, Mexico City's air is cleaner than that of Los Angeles 30 years ago.
  • Mexico, however, cannot afford to implement American environmental standards until its economy develops and its political system continues to open up.

Geddes says it is vital to understand the connection between economic progress and the increased demand for environmental quality. Indeed, demonizing poorer nations for not adopting higher standards or for accepting "sweatshop" conditions is counterproductive:

  • Multinational corporations, for instance, pay significantly higher wages than local firms; their jobs are among the most coveted in developing countries.
  • The World Bank notes that globalization is responsible for a spectacular decline in poverty in East and South Asia; between 1990 and 2001, the number of people living on less than $1 day in this region fell from 472 million to 271 million.

Source: Pete Geddes, "A Race to the Top," Foundation for Research on Economics and the Environment, January 19, 2005.

 

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