Effects Of International Trade And Globalization On The Environment

International Trade and the Environment

Purpose of the study

This research study presents the different effects of international trade and globalization on the environment. It also explores the effects of Trade liberalization to the environment, the use of trade Agreements in order to protect the environment, as well as the sustainable development Agenda.

International Trade and the environment

International trade is the exchange of services, goods, and capital across territories or international borders. International trade is a result of globalization and the two terms can be used interchangeably (Rasmus, 2016). International trade is useful in promoting economic growth and trade between different countries. The current technological dynamics have made international trade part and partial   of modern economies. Technology has eased the flow of goods and services across borders with no limits. Therefore, the gains of international trade in today’s economies are higher than they were in the previous years. However, International trade also has negative effects on the environment, some of these are promotion of degradation and pollution. The environment comprises of a number of components. The most important components are; air, water, flora, fauna, and human beings themselves. Countries participating in international trade always affect these components of the environment.Therefore, there is need to create trade agreements so as to protect the environment from trade liberalization and international trade activities.

Using Sinopec Group, a Chinese gasoline and oil corporation located in china as the case study (Sinopec, 2010), the effects of international trade and trade liberalization on the environment are to be assessed. Additionally, the sustainable developments Agenda as well as the existing trade agreements to protect the environment are also tackled

Impacts of International trade on the environment.

International trade is a very important aspect or factor in civilisation of countries since it eases trade, communication, and transportation of goods and services among different countries. Services and goods are sent where they are needed easily. Given the fact that international trade is useful, it also has some impacts on the environment components such as fauna and flora. Some of these negative impacts are pollution, degradation, chronic diseases such as cancer.

The considered case Study industry is the oil industry. The case study firm is Sinopec Group, the largest petroleum and gas industry in the world having headquarters in Beijing China (Sinopec, 2018). Petroleum is one of the main products dealt in while carrying out international trade. It’s nicknamed “black gold” due to its ability to rise revenue for countries where it’s used as the main export. Crude oil is very useful in the manufacturing of plastics and medicines; fuel used by cars, planes, and other automobiles. It’s also used in heating systems and manufacturing of gas thus making life easier.

Impacts of International Trade on the Environment

Trade liberalization involves increased production through setting up more industries and production centres. These cause contaminations which are very harmful to human life in the way that they easily affect the green house. Affecting the green house may lead to low carbon dioxide absorption from the environment and less oxygen generation to the environment. Also, Soil and water contamination may lead to low food production (Ehrenfeld, 2018).Given the fact that Petroleum products are essential in the daily today life; exploring, drilling, refining, and transportation of oil products across boundaries is dangerous to the environment (Montagnolliet al, 2015). Some of the negative impacts of international trade through trading oil are; Oil spilling which results from the breakage of pipelines, oil wells, trucks, and ships moving oil from one point to the other is hazardous. It is very dangerous since it is a key factor to water and soil contamination.

Supporting International trade through using crude Oil as the trade product negatively affects the environment, the products produced by Sinopec are highly inflammable causing devastating fires and explosions (Tuccella et al, 2017). The nearby fauna and flora are affected thus making liberalization dangerous to the environment. The same products when burnt are likely to emit carbon dioxide which easily spread diseases to humans for example cancer of the lungs through inhaling the fumes. Therefore, there is need for countermeasures to curb the causes of these emissions.

International trade where Sinopec deals in oil products is very useful.  The different oil products are used in normal day to day life. The disadvantage comes in when there is need to dispose the waste. Waste is hard to dispose. In Asia and Africa, waste sometimes is disposed in streams and water passages thus causing high chances of unsafe water (acidic). This waste is one of the cause of flooding of swamps (Tuccella et al, 2017). Therefore, governments’ for these countries are looking forward to getting other alternatives to deal with getting rid of this waste. One of the methods applied is burning.  Fumes from automobiles run by petroleum as well as fumes from burning plastics and refining oil contain carbon monoxide gas which is very dangerous to the environment. These fumes are the major cause of global warming and acidic rains in different countries.

Effects of Trade liberalization to the environment

Trade liberalization refers to the reduction or total removal of barriers or restrictions on trade. It’s a tool for promotion of free exchange of services and goods among countries (Lind, 2016)). Trade liberation paves way for the elimination of trade barriers across countries. With liberation, capital flows across nations without any limitations. The adoption of trade liberation is one of the factors that has been critical in encouraging multinational organizations globally. Using Oil industry as the case study, trade liberalization has a large impact on the environment, some of the impacts are described (Mansfield, 2012). Trade liberalization increases the exchange of goods and services among countries since tariffs are reduced.  It should be noted that high tariffs causes imports to be expensive which lowers the demand of products internationally.

Effects of Trade Liberalization to the Environment

Due to increased production, trade Liberalization creates openness to depletion of resources as well as pollution (HDOH, 2012).  It should be noted that, trade liberalization  paves way for multinational organizations to open up branches in different countries which makes the negatives impacts of industrialization like pollution unavoidable. This openness on pollution consists of pollution of the air where fumes from refineries in different industries, burning plastic will emit more carbon dioxide and carbon monoxide (Tuccella et al, 2017). These gases are very dangerous to fauna and flora, they cause chronic diseases to humans. The openness to trade will lead to further poor waste disposal rising from increased production aimed at meeting demand and raising revenue for the companies (U.S. Energy Information Administration, 2018). Garbage is disposed within water bodies and swamps, this affects the inhabitants such as the fish due to intoxication nature of the waste.  

Liberalization of Sinopec commodities on one hand will raise revenue for the company, on other hand will degrade the environment through fuelling climatic changes. The increase in climatic changes will raise due to increased toxicity from factors like solubility and weathering (Anna, 2018). The petroleum products are characterized with creation of sheen on the water surface as a very thin layer. This causes an optical phenomenon known as interphase; it also makes the water not safe for the different living creatures that exist in the water bodies and swamps. Climatic changes caused by   increased production have a possibility of increasing on the possibilities of global warming.

Important to note most industrialized economies have a high rate of waste emission. The increase in the level of waste emission has not spared the environment of most of these economies destroying the ozone layers leading to increased healthy and environmental hazards (Rasmus, 2016).  Global warming is the main cause of depletion of the green house due to direct heat, it catalyses the production of acidic rains disastrous to plant and animal life (Ramanathan & Feng, 2008). The exposure of Benzene from the gasoline and crude oil products from the case study firm is seriously dangerous to human life since it is referred to as the main cause of Leukaemia. Therefore, trade liberation has consequences on the economies of different countries. Hence some of the trade liberation policies have to be revised for purposes of maintaining sustainability of the economy both in the short and long run period (Marvin, 2011).

Sustainable Development Agenda, and Use of Trade Agreements to Protect the Environment

Sustainable development Agenda, and use of trade Agreements to protect the environment.

Sustainable development looks beyond the current stand and puts into consideration the near future. The sustainable develop agenda comprehensively looks at how development can be promoted without compromising the future. A number of initiatives such as environment protection are considered in the sustainable development agenda.  In the 2030 Sustainable development Agenda, trade Liberalization was linked to the issues of environmental protection (Jens, 2018). The adversaries of trade liberalization argued that the liberalization of international trade is very harmful to the environment. They proposed that it will lead to lax of environmental standards by countries involving in the trade. They further made an argument that trade liberalization would be a key factor to unsustainable natural resource utilization. The proposers of free trade and trade liberalization argued that the liberalization of the trade will be good for environment; they added that with free trade there would be transfer of “environmental friendly technologies” that would prompt production of goods having comparative advantages. Therefore, the debate between environmentalists and free traders led to numerous environmental innovations to multilateral trading system.

According to the E/CN.17/2000/20-Report on the 8th session, Decision 8/6 under the title “Economic growth, trade and Investment” different decisions and precautions were listed that are essential when undertaking trade liberalization. These set of principles are aimed at promoting environmental safety when international trade is carried out. They are described from principle17 to principle 21 and they are aimed at causing environment and trade policies reciprocally exclusive.

These policies aimed at creating mutuality between trade and environment and are explained and used in the Sustainable development Agenda 2030 (Ranja, 2018).

Principle 17 suggests that International organizations for example World Trade Organization(WTO) and government together with MEAs(Multilateral Environmental Agreements) should work cooperatively inorder to exploit different ways of enhancing complementarities between environmental protection and trade liberalization so as multilateral trading system is more reactive to sustainable growth concerns. Therefore parties involved are encouraged to identify the different opportunities where trade liberalization promotes sustainable development for example actions of eliminating trade-distortive and environment harm (Ranja, 2018).

Principle 19 emphasizes pursuit of effective environmental policies that are both national and international. This decision rules out environmental measures that are protectionist in nature. The aspect of environmental protection is critically significant while looking at sustainable development. When development is pursued minus putting into consideration the environment in most cases its short lived. The flora and fauna need to be given keen attention while implementing development strategies.

Principle 20 emphasizes international organizations and government to consider their relationship and their agreements with the MEAs and the world Trade organization. Secondly, it should also consider the importance of environment and trade agreements as they are mutually supportive.

Principle 21 emphasizes international organizations and developed countries in relation to their commitments through the multilateral agreements of the environment are to help countries that are developing to implement the needful agreements so as to protect the environment during the trade.

These principles were developed to give protection to the environment during trade liberalization and if put into consideration there is assured protection of the environment from degradation and pollution by trade firm such as Sinopec Group. The different trade agreements concerning the environment donot only protect the animals and flora but also the human who participate in the trade of goods and services since the inhaling of carbon dioxide gas would affect their health (Ranja, 2018).

Conclusion

International trade which involves exchange of services and goods beyond boundaries may be dangerous to the environment through the different firms which involve themselves in the goods production. The case study was conducted on Sinopec the largest oil and gas industry in the world and having headquarters in Beijing. The different effects of international trade on the environment include oil spills which may lead to fire outbreaks and also affecting the environment, affecting the green house during drilling and transportation thus causing low carbon dioxide absorption, poor disposal of the garbage which is harmful to the flora and fauna. Trade liberalization is considered to worsen the problem since there would not be tariffs or strict barriers to regulate the exchange of these goods and services. Some of the effects rising from Trade liberalization include increased exploitation of resources, increased environmental pollution, increased poor waste disposal, and emission of fumes. Because of the mentioned impacts, world trade organizations together with Environment organization made agreements concerning the protection of the environment during trade. 

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