Sustainable Development: International Environmental Agreements and International Trade Chapter 20 MODULE 7: Global Environmental Management

Sustainability is defined by the National Science Board as meeting present needs without compromising the ability of future generations to meet their own needs. Reference Building a Sustainable Energy Future: U.S. Actions for an Effective Energy Economy Transformation, National Science Board, NSB 09-55, August 3,

1. Sustainable Development as a Global Objective Sustainable development refers to managing earth’s resources to assure _________ quality and abundance for future generations – Aims to achieve ____________________ and _______________________ – Also referred to as intergenerational equity Involves fundamental change in how society makes market decisions – both consumption and production In practice, there are criticisms and concerns – Nobel Laureate Robert Solow argues against using sustainable development as a policy objective because it is a vague concept; instead consider sustainability as an obligation to future generations 3

Growth and the Environment Sustainable development relies on the premise that economic growth and environmental quality must not be competing goals. Why is this important? Data show that the environmental impact per unit of income associated with growth must decline between 3.5 and 4 percent per year to avoid further pollution and natural resource depletion – Problem is more serious for developing countries that have high growth rates and rapidly rising populations, such as China and India 4

Growth and the Environment: Environmental Kuznets Curve (EKC) Research has examined whether a technical relationship exists between economic growth and pollution A model of this relationship is the environmental Kuznets curve (EKC), an __________ shape, implying that: – Early stages of industrialization are linked to relatively high pollution levels when growth is a priority and environmental controls are lenient or nonexistent – More advanced economic development is linked to a shift in the opposite direction with greater concern for environmental quality and a strengthening of environmental regulation 5

Environmental Kuznets Curve 6 More advanced stages of development Early stages of industrial development Income per capita Pollution EKC

2. Framework for Sustainable Development United Nations Conference on Environment and Development (UNCED) – commonly known as the Rio Summit – was a forum held in ______ to discuss issues relating to sustainable development Included in the summit’s key documents were: – __________ – a voluntary action plan outlining the course for worldwide progress toward sustainable development – _______________ – a list of 27 principles to act as guidelines for achieving global environmental quality and economic development 7

World Summit on Sustainable Development (WSSD) was held in Johannesburg in ______ to renew interest in sustainable development and assess progress since the Rio Summit Among the summit’s accomplishments: – Adopted a plan to fully implement Agenda 21 – Strengthened the notion of sustainable development – Established over 300 partnership initiatives to complement government actions aimed at sustainable development 8

3. International Agreements to Control Transboundary Pollution Montreal Protocol and Amendments – Aimed at phasing out ozone-depleting substances – Established and made permanent a Multilateral Fund to help developing nations in this effort U.N. Framework Convention on Climate Change (UNFCCC) – Kyoto Protocol to the UNFCCC Calls for 38 developed nations to reduce GHG emissions to 5.2% below 1990 levels by 2012 with no targets on developing countries Provides for the use of market-based instruments, called flexible mechanisms to achieve emissions targets, including a trading system of GHG allowances 9

___________________________ (LC72) – Prohibits ocean dumping of certain wastes, including radioactive wastes – Amended by the 1996 Protocol 2006 Amendments to the Protocol add provisions for carbon sequestration under the seabed (see Application 20.2) US-Canada Air Quality Agreement – Aimed at combating acid rain and visibility impairment – Implemented the Acid Rain Annex to set emissions caps on SO 2 and NO x 10

4. International Trade and Environmental Protection (1) Free Trade Versus Protectionism Proponents of free trade argue that nations should trade with one another because there are tangible gains: – Higher worldwide ________ – More competition and lower _____ in global markets Protectionism supports using trade barriers to protect the domestic economy from foreign competition, because they believe trade can have negative consequences such as – Limit the growth of infant industry – Job losses (to nations with cheap labor) – Threats to environmental quality 11

Concerns about International Trade and Environmental Quality Production costs are lower in nations with more lenient environmental standards, giving their producers a competitive advantage, sometimes called the _________________________ Imports produced in nations with lax regulations on toxic chemical use, fuel efficiency, coal consumption, etc. may lead to ___________ ________________ 12

Counter Arguments Economic gains from trade will help poorer nations afford the costly cleanup of environmental pollution An improved economy can provide means to implement better environmental policy, as implied by environmental Kuznets curve --This argument is consistent with sustainable development Both sets of arguments were part of negotiations for major international trade agreements 13

(2) International Trade Agreements and Environmental Goals ______________________________________ (NAFTA) NAFTA was reached by the U.S., Mexico, and Canada in 1992 Environmental provisions include: – To commitment to sustainable development – To implement NAFTA in accordance with environmental protection, not lowering standards to attract investment Formed the North American Commission for Environmental Cooperation (CEC) to address environmental impact of increased tradeNorth American Commission for Environmental Cooperation (CEC) 14

____________________________________(GATT) Executed in 1947, GATT was a major international treaty aimed at reducing trade barriers Environmentalists were concerned about how GATT rulings might run counter to environmental goals – e.g., under GATT, an import cannot be restricted solely on the basis of an exporter using a pollution- generating input or production method After negotiations called the Uruguay Round, World Trade Organization (WTO) was formed as successor to GATT 15

World Trade Organization (WTO) An international association aimed at facilitating trade and overseeing trade policy It established a Committee on Trade and Environment (CTE), whose directive is: – To identify the relationship between trade measures and environmental measures to foster sustainable development – To recommend any necessary changes to the multilateral trading system 16

Earth Summit in Rio Preamble of Agenda 21 “Humanity stands at a defining moment in history. We are confronted with a perpetuation of disparities between and within nations, a worsening of poverty, hunger, ill health, and illiteracy, and the continuing deterioration of the ecosystems on which we depend for our well-being. However, integration of environment and development concerns and greater attention to them will lead to the fulfillment of basic needs, improved living standards for all, better protected and managed ecosystems and a safer, more prosperous future.” 17 Source: United Nations, Division for Sustainable Development, ch. 1, paragraph 1.1 (June 29, 2000.)