Environmental quality should be a priority

What is the issue?

• Environmental issues have been increasingly disturbed because of global business practices, social issues and problems in handling waste.
• Environmental concerns are weakening developing countries and they cannot be ignored any more.

What is the connection between growth and environmental degradation?

• China logged large area of forests in the last decades of the past century.
• The Chinese government concluded that deforestation was behind these events, and it has banned logging.
• The USA has banned the import of shrimp harvested without the turtle excluder device, because of its concern for endangered sea turtles.
• In 1994, the WTO intervened to address the above concern which is known as the Shrimp and Turtle case. The ruling was adopted in 1998.

How developing countries like India are affected?

• They are affected due to the relocation of polluting industries from developed areas.
• Many products that are banned in developed nations are marketed in the underdeveloped world.
• Incidences of droughts and floods have caused large financial losses.
• Over 2,000 Himalayan glaciers have melted in the past few decades, causing floods and climatic changes.

What imposes heavy social costs?

• It is caused by dumping of nuclear and hazardous waste in developing countries and the shifting of polluting industries to developing countries.
• It has serious health effects to the residents.
• Exploitation of natural resources of developing countries to satisfy global demand causes ecological problems.
• African nations have long been at the centre of such incidents.

How are the MNCs exploiting underdeveloped countries?

• MNCs use polluting technologies to exploit these countries. These MNCs must be severely punished.
• Environmental CSR aims to reduce damaging effects of these MNCs’ business processes.
• At times, developed nations raise environmental issues as a trade barrier rather than for genuine reasons.

What is the intensified debate?

• The debate has intensified in recent years on the connection between trade and environment, and the role the WTO can play is important in promoting environmental-friendly trade.
• There are many circumstances where trade and the pursuit of trade liberalisation have had harmful environmental effects.
• Also, trade can negatively impact environment when property rights in environmental resources are ill-defined or prices do not reflect scarcity.

What are the economic factors leading to degradation?

• The FTA expansions result in the abuse of scarce environmental resources and degradation, which worsens through trade.
• Some of the pollution can be purely local and others can have global repercussions.
• If some countries have low environmental standards, big businesses are likely to shift production of environment-intensive products to these pollution havens.
• Trade-induced competitive pressure forces countries to lower their environmental and health standards.

What is the positive point in international trade?

• Some nations have extremely high quantities of raw materials, which they are unable to use domestically.
• With freer trade, nations can take advantage of their material surplus to benefit their economy by selling this surplus to other nations.
• Organisations like Unilever, IKEA, IBM and Adobe have the most comprehensive CSR programmes.

Source: Financial Express