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 5: Trade, Natural Resources and Developing Countries

Edward B. Barbier


Edward B. Barbier In the current era of globalization two concerns have been expressed about the environmental effects of expanding world trade. The first, which is a more frequently heard criticism, is that trade is ‘bad’ for the environment. Economic arguments underlying this view usually cite alarm over economic scale relative to ecological limits and the implied effects of globalization on incentives for domestic environmental regulation (see Daly and Goodland, 1994; Rees, 2006). The counter-argument in economics has been that ‘in general, trade is not the root cause of environmental problems, which are due to market and intervention failures’ (OECD, 1994, p. 8; see also Copeland and Taylor, 2003). Many of the other chapters in this handbook address this trade versus environment debate; therefore it will not be the focus of the following chapter. Instead, I shall focus here on a second concern, which suggests that trade could be ‘bad’ for development: many developing countries are currently failing to manage their natural resources efficiently and sustainably for successful development, and ‘opening to trade’ could be perpetuating the mismanagement problem. This view stems from recent empirical findings that many resource-dependent developing countries – those countries with a high percentage of resource-based commodities to total exports or to GDP – tend to have lower levels of real GDP per capita, lower growth rates, higher poverty levels and a higher proportion of their populations living in poverty (Barbier, 2005; Bulte et al., 2005; Ding and Field, 2005; Mehlum et al., 2006; Neumeyer,...

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