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Introduction
Trade liberalization presents major opportunities, especially to developing nations. New policies put in place to allow global trade have helped create and sustain global economic growth. Living standards have gone up substantially as a result of job creation and exposure to different cultures. Products from different nations have bigger markets now and the global economy is strengthened through increased volumes of trade. For the developed nations such as the USA, trade liberalization has helped create jobs, foster economic growth and improve consumer choice (Tietenburg and Lynne, 2008). The world has become one big market where traders can sell and buy conveniently. Despite all the benefits that come with trade liberalization, environmental concerns have been a thorny issue and a subject of heated debates. While economists argue in favor of free trade, environmentalists argue that it is bound to harm and destroy the environment in the long run. They argue that the benefits will be overshadowed by the consequences of a degrading environment.
Environmental effects
Trade liberalization is aimed at increasing the volume of trade. Consumers are able to access more products and manufacturers are able to access a bigger market. Large volumes of trade mean more manufacturing and exploitation of natural resources. As Cole and Elliot (2003) point out, trade liberalization exhausts the natural environment, especially in the resource exporting sector . Bigger production capacities in different regions have meant more energy demands. The amount of energy consumed in different countries is staggering. Most of the oil reserves are already exhausted and the energy demands continue to rise (Prato, 2002). The United States is still the biggest consumer of oil followed by China. Environmentalists argue that as more countries open up to global markets, the demand for products increases, and more production means higher energy demands (Global Crisis Management Organization, 2009).
The other challenge facing environmentalists today is the complexity of harmonizing environmental regulations (Antweiler, Copeland, and Taylor, 2001). Implementing environmental regulations globally is hard since it has to be done in different stages across all the countries involved. As a result, efforts put in place in one region may be futile if they are not backed up by other regions participating in the global markets. Differences in policies make it hard to have consistency and countries with weaker policies suffer.
As the world works hard to meet the demands of the global markets, the land is being over-exploited. A big percentage of land today has been cleared to meet the high demand for agricultural produce. A good example is Malaysia where more than 60% of the forest land has been cleared to make room for palm trees (UNEP, 1999). The result has been extreme soil erosion in Western Malaysia, making it hard for farmers to grow anything. This and many other examples put trade liberalization on the spot and on the wrong side of environmentalists.
As global trade grows bigger and bigger, developing nations have become a damping site for defective products from developed nations (Perman, Ma, McGilvray and Common, 2003). Rejects and low-quality products are sent to these markets, many of which do not have the capability to deal with the consequences of having such products in their market. African countries have been a destination for products whose packaging is not environmentally friendly. Since many developing countries have no capabilities to test for quality, many products sent to those markets do not meet the required environmental and quality standards (Khan, 2008). Low-quality products harm the environment and are hard to dispose of.
Another adverse effect of trade liberalization is crop-mixing in an attempt to increase production (Markusen, 2004). Many countries are now growing genetically modified products, which promote the use of more fertilizers and pesticides. The land, therefore, has more toxins and so do water bodies. The chemicals kill important micro-organisms and cause an ecological imbalance. Many fertile regions are now experiencing smaller harvests, prompting the use of more chemicals. Natural habitats have been affected by new farming trends. Polluted rivers have caused the death of animals and made irrigation even harder.
Pollution is a major concern for environmentalists as far as trade liberalization is concerned. In an attempt to increase production and supply, more production and movement have increased the levels of pollution. Carbon intensity grew by 3.5% in the last year (Runge, 2011). Energy production increases every year and population growth means more demand. A big percentage of energy used in the world today is from coal, one of the biggest polluters of the environment.
Increased transportation activities contribute largely to pollution. It is estimated that energy used for transportation in China alone is 14.0 quadrillion Btu per year (Anderson, 2011.). It is also estimated that auto mobiles contribute to 25% of the worlds pollution.
Developing countries lack the capacity and capabilities to recycle and treat waste (Muthukumara and Shreyasi, 2006). Large volumes of waste generated from production in these regions are either dumped in water bodies or buried in landfills. The results of such activities are evident in extreme weather patterns and reduced or dry water bodies. As the richer nations try to cut on the cost of production, most of them are moving production to third world countries that lack the capabilities to manage the waste created (Veen-Groot, 2006).
Conclusion
Trade liberalization has brought with it major opportunities for nations, producers, and consumers. Availability of products is at a satisfactory level and market opportunities for suppliers are bigger. However, the benefits have many times left the economists blind to how many environmental consequences the process has. The cost of repairing the damages may be bigger than the benefits if proper measures are not observed. As Antweiler, Copeland, and Taylor (2001) point out, the world will only reap maximum benefits from trade liberalization if it is done in moderation.
Major environmental effects include pollution, over-exploited land, improper waste management, over-exploited energy sources, and other natural resources, among many others. Lack of harmonized regulations has been the biggest obstacle towards solving the challenges. Different capabilities by different nations to manage environmental challenges also makes it hard to harmonize solutions and implement them effectively across the globe. Cleared forests, extreme climatic conditions, and more extinct species are enough proof of a degrading environment, something blamed largely on globalization and liberalized trade. As the world enjoys the benefits that come with trade liberalization, it is imperative that effective environmental measures be implemented to avoid a bigger crisis in the future.
Reference list
Anderson, K., 2011. The greening of world trade issue. New York: Harvester Wheatsheaf.
Antweiler, W. Copeland, B.R. and Taylor, M.S., 2001. Is free trade good for the environment? American Economic Review, 91(4): pp. 877-908.
Cole, M.A. and Elliot, R.J.R., 2003. Determining the trade environment composition Effect: The role of capital, labor and environmental regulations. Journal of Environmental Economics and Management, 46(3): pp. 363-383.
Global Crisis Management Organization, 2009. Crisis Management. Web.
Khan, S.R., 2008. Trade and environment: Difficult policy choices at the interface. London: Zed Books.
Markusen, J.R., 2004. The theory of international trade. New York: Harper and Row.
Muthukumara, S.M. and Shreyasi, J., 2006. Trade liberalization and the environment in Vietnam. Washington, DC.: World Bank, Environment Department.
Perman, R. Ma, Y. McGilvray, J. and Common, M., 2003. Natural resources and environmental economics. 3rd ed. London: Longman.
Prato, T., 2002. Natural resources and environmental economics. Ames Lowa State University Press.
Runge, C.F., 2011. Free trade, protected environment: Balancing trade liberalization and environmental interests. New York: Council on Foreign Relations Press.
Tietenburg, T.H. and Lynne, L., 2008. Environmental and natural resources economics. Boston: Addison-Wesley.
UNEP, 1999. Trade liberalization and the environment: Lessons learned from Bangladesh, Malaysia, Chile, India and Uganda. New York: UNEP.
Veen-Groot, D.B., 2006. New perspective for ecological economics. Ecological Economics, 34(3) :pp. 331-346.
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