FREE trade is not a one-way ticket to pollution purgatory, claims a World
Bank report. Many greens, and some economists, say free trade encourages
industry to relocate to countries with lax anti-pollution laws, mostly in the
developing world. To maintain competitiveness, rich nations join this downward
slide towards more liberal attitudes to pollution, dubbed “the race to the
dzٳٴdz”.
But last week, free-trade advocates at the World Bank hit back with new
research suggesting that this logic does not hold in the real world. David
Wheeler of the Bank’s development research group has found that the three
countries to which foreign manufacturers moved in the greatest numbers in the
1990s—China, Mexico and Brazil—have cleaner air than before.
Despite rampant industrialisation, urban air pollution in China has fallen by
40 per cent. After peaking in the early 1990s, Mexico City’s air has become
cleaner as the North American Free Trade Association filled the megacity with
American factories. And in Brazil’s industrial heartland around São
Paulo, pollution fell by more than half between 1984 and 1998.
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With pollution in the US falling too, Wheeler concludes there is “no sign of
a race to the bottom. Air quality seems to be improving in countries at all
income levels.”
The reason, he says, is almost as surprising. Despite the frequent complaints
of manufacturers, the cost of cleaning up is not so great. And many companies
relocating from the rich world automatically bring their higher standards with
them as part of a “good neighbour” policy.
However, Larry Lohmann of The Corner House, a British group fighting trade
globalisation, dismisses the research as “a piece of public relations. Many of
the declines he documents occurred before the boom in foreign investment,” he
says. And the data only covers suspended particulates—dust and
soot—rather than more insidious pollutants.
Some economists may be disappointed, however. “Between you and me,” the World
Bank’s chief economist Lawrence Summers wrote in a memo leaked in 1992,
“shouldn’t the Bank be encouraging migration of dirty industries to less
developed countries?” They should be free to sell their air for polluting to the
highest bidder, he argued. Summers became Clinton’s treasury secretary.
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More at:
www.worldbank.org/nipr/work_paper/RaceWP1.pdf