Handbook on Trade and the Environment
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Handbook on Trade and the Environment

Edited by Kevin P. Gallagher

In this comprehensive reference work, Kevin Gallagher has compiled a fresh and broad-ranging collection of expert voices commenting on the interdisciplinary field of trade and the environment. For over two decades policymakers and scholars have been struggling to understand the relationship between international trade in a globalizing world and its effects on the natural environment. The authors in this Handbook provide the tools to do just that.
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Chapter 3: The Environmental Kuznets Curve

James Van Alstine and Eric Neumayer


James Van Alstine and Eric Neumayer Introduction The presumption is often made that economic growth and trade liberalization are good for the environment. The risk is that policy reforms designed to promote growth and liberalization may be encouraged with little consideration of the environmental consequences (Arrow et al., 1995). At the early stages of the environmental movement some scientists began to question how natural resource availability could be compatible with sustained economic growth (Meadows et al., 1972). Neoclassical economists, on the other hand, fiercely defended that limits to growth due to resource constraints were not a problem (e.g. Beckerman, 1974). Thus the debate between the so-called environmental pessimists and optimists began as centered on non-renewable resource availability. Although the debate has continued throughout the years (e.g. Beckerman, 1992; Lomborg, 2001; Meadows et al.,1992; 2004), the pessimists were perhaps naïve in extrapolating past trends without considering how technical progress and a change in relative prices can work to overcome apparent scarcity of limits (Neumayer, 2003b, p. 46). In the 1980s, issues such as ozone layer depletion, global warming and biodiversity loss began to refocus the debate around the impacts of economic growth on environmental degradation. Interest was shifting away from natural resource availability towards the environment as a medium for assimilating wastes (i.e. from ‘source’ to ‘sink’) (Neumayer, 2003b, p. 47). Also, following the Brundtland Report (WCED, 1987), the discourse of sustainable development largely embraced the economic growth logic as a way out of poverty, social deprivation and also...

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