Negative Effects of Globalization - Chemical Waste and Air Pollution

Economic activity often result in the negative effects of globalization, such as chemical waste and air pollution. Still, the cost of cleaning these effects up is not included in the price of a product. In many cases, specifically in the developing world, manafacturers take advantage of lax regulations and cause air pollution and chemical waste without restraint.

Some economists studying globalization have come up with a theory that this behaviour follows a pattern first discovered by economist Simon Kuznets. According to Kuznets' theory income inequality keeps increasing with per capita income until a critical income level is reached, after which inequality declines again. The graphic representation of the Kuznets theory is called the Kuznets curve, and it resembles a bell curve.

If Kuznets logic can also be applied to the relationship between income and environment, it results in a 'environmental' Kuznets curve, which shows the negative environmental effects rising with per capita income. But once a tipping point is reached, a higher per capita income start correlating with an improving environment. This can clearly be observed in developing nations where per capita income is low, and more pressing social needs enjoys priority over environmental regulation. For a while economic development means more negative environmental effects like air pollution and chemical waste, but as soon as a country becomes more developed, more regulations are set in place to protect the environment. First, environmental harm is stabilized, and as income rises further, some of the new wealth is used to reverse the damage already done.

This theory holds important implications for the debate about global warming, because it implies that greenhouse emissions from developing countries(especially China and India) will continue until a tipping point in per capita income is arrived at. It turns out that very little empirical evidence exists to prove this theory however. The relationship this theory describes has so far been shown to only apply to urban concentrations of sulfur dioxide.

The environmental Kuznets theory rests on two assumptions, which is that environmentally friendly production is more expensive than environmentally unfriendly production, and that poor countries can't afford environmentally safe production until they reach a certain income level. These assumptions could be false however. Denmark's economy have recently grown by 50% without an increase in greenhouse emissions, thereby disproving the first assumption. Denmark achieved this by shifting 22% of its electricity generation to wind power. The success of ecolabeling, a market-orientated program that promotes environmentally friendly products, also suggests that economic growth does not always have to coincide with environmental harm.

The environmental Kuznets theory states that economic growth in poor countries will always coincide with negative environmental effects until a certain income level is reached.

Source: The Bedside Baccalaureate