• Environmental impacts

Environmental impacts of trade liberalisation

This paper fleshes out the various linkages that exist between trade policy and environmental health. It is an analysis of the potential impact pathways by which trade policy might affect environmental health, based on a review of the literature and on the authors’ knowledge of trade-environment and assessment issues. In exploring environmental health this paper will not focus on the quality of life aspects so much as the physical health aspects.

Linkages between trade policy and environmental health exist as consequences of a number of driving forces which can be classified as the following: changes in production patterns, changes in income and regulatory impacts. They trigger different impacts:

Changes in production patterns:

• the efficiency that drives scale changes probably reduces environmental impact per unit of production
• economy might shift to a mix that is less polluting overall
• more production means more production-related environmental damage
• the economy might shift to a mix that is more polluting overall
• increased transport traffic means more pollution; increased transport of hazardous goods (where it occurs) creates more risks.

Changes in income:

• increases in income mean more consumption, which means more consumption-related pollution
• increased income might equate to increased demand for environmental quality, leading to more stringent environmental laws.

Regulatory impacts:

• services or investment law might curtail governments’ ability to regulate in the public interest. Trade with low standard countries might lead to industrial relocation and/or regulatory chill.

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