CEI Expert Testifies on Trade and International Environment
International Trade and Environmental Protection
U. S. House of Representatives
Committee on International Relations
Subcommittee on International Economic Policy and Trade
Honorable Ileana Ros-Lehtinen, Chairman
21st June 2000
Chairman Ros-Lehtinen, thank you for the invitation to testify here today on the important topic of the connections between international trade and environmental protection. My name is Myron Ebell. I am director of international environmental policy at the Competitive Enterprise Institute (CEI), a non-profit and non-partisan public policy institute dedicated to advancing the institutions of liberty.
CEI has developed a good deal of expertise over the past decade on international environmental and trade-related issues, particularly under my predecessor, James M. Sheehan, and our chairman, Fred L. Smith, Jr. As part of my testimony today, I am submitting several relevant articles by CEI staff and by Distinguished Fellow Jack Kemp.
CEI has participated as an accredited NGO in a number of international negotiations, including the Rio Earth Summit, the Kyoto Protocol, CITES, the Cartagena Protocol, and the World Trade Organization. Last year, CEI joined a new international NGO, International Consumers for Civil Society (ICCS), which, under the chairmanship of Frances B. Smith, president of Consumer Alert, has brought together a number of free market NGOs from around the world.
At the WTO Ministerial in Seattle, CEI helped ICCS hold a major conference on “Ensuring Open Trade and Global Prosperity.” Speeches and papers by leading experts considered the various connections between trade and the environment, and in particular the “linkage” issue; that is, the attempt by environmental pressure groups to become official parties to WTO deliberations and to make the WTO into an environmental enforcement agency. Unfortunately, the reasoned discourse of our ICCS conference on 29th November was drowned out by the protestors and rioters in the streets of Seattle the next day. And so I am grateful for the opportunity you have given me here today to share some of the observations and conclusions from the ICCS’s conference.
The connection between trade and the environment is as strong as it is obvious. Increasing international trade generally leads to increasing environmental vitality. The reason is that trade is one of the principal means of increasing wealth. As people become wealthier, they become more concerned about environmental quality and they acquire the resources to spend on protecting the environment. The environmental effects of a lack of wealth can be seen most clearly in subsistence economies. People living at the subsistence level don’t worry much about pollution or biodiversity; they are too busy working to earn their next meal. And even if they did worry, they are too poor to do anything about it. A stark example was provided when the Indonesian economy collapsed in 1997. Newspapers reported that hungry people were taking to the jungles to hunt wild animals to eat. They were not concerned that many of these animals were rare or endangered species.
The simple connection between prosperity and a healthy environment has been obscured by the rantings of the international environmental establishment against the alleged evils of modern industrial civilization and corporate globalization. For them, trade is the enemy precisely because it increases wealth. A cornerstone of modern environmentalism is the claim that affluence and technology are the problem—that they actually increase environmental degradation and deplete the world’s natural resources.
This claim is demonstrably false. (A thorough refutation of the neo-Malthusian worldview upon which it is based can be found in two essays in Earth Report 2000, a CEI book published this year by McGraw Hill: “The Progress Explosion,” by Ronald Bailey; and “Richer is More Resilient,” by Indur Goklany.) To take just one example, pollution levels are much higher in Delhi and Beijing than in New York or London, even though consumption levels are much lower in the former cities. Delhi has very few cars and very low electricity production, yet the air quality is so terrible that it kills 10,000 or more people a year.
Moreover, if trade itself were the problem, then the countries with the lowest tariffs and the most trade should have the worst environmental quality and those countries with the highest tariffs and the least trade should have the best environmental quality. But, of course, the reverse is true. The United States, the European Union, and Japan are the world’s leading trading nations and the world’s leaders in environmental protection. Conversely, India has pursued closed economic policies for decades and has seen its share of total world trade drop from approximately .75% to .35% without experiencing any noticeable environmental improvements.
Mere facts, however, have never been of much concern to the environmental movement. When reality threatens to get in the way, they simply create their own “reality” and move ahead with their agenda. That is happening today in the arena of international trade and environmental negotiations on a gigantic, almost mind-boggling scale. Hundreds of green NGOs pursue their goals in a bewildering variety of ways and in every possible international forum. While thousands of protestors and rioters filled the streets of Seattle, hundreds of accredited NGO delegates from environmental pressure groups filled the halls of the convention center where the WTO Ministerial was taking place. And the number of green NGO delegates in Seattle was not an unusual occurrence. They show up by the hundreds and even thousands at every significant international environmental negotiation. They are able to do this because the combined budgets of all the green NGOs total in the hundreds of millions of dollars. These funds come primarily from American charitable foundations, U. S. government agencies such as EPA, and many European governments and the European Union. To a large degree, green NGOs and not the world’s sovereign nations now set the agenda for multilateral environmental agreements (MEAs) and have become the loudest voice in WTO negotiations. (A detailed overview of the size and scope of green NGOs can be found in a book written by my predecessor at CEI, James M. Sheehan, and published by Capital Research Center in 1998, Global Greens: Inside the International Environmental Establishment.)
Since the United Nations Environment Summit in Stockholm in 1972, over 250 environmental treaties and conventions have been negotiated. Many more are in the works. While many of these agreements are minor, a number of the major MEAs have serious negative consequences for world trade. For example, the Basel Convention on Transboundary Movements of Hazardous Waste and Their Disposal regulates international trade in a wide variety of materials, many of them not hazardous. By raising the costs of recycling a number of industrial materials, the Basel Convention has had negative environmental as well as economic effects, particularly on poorer countries. It is worth noting that the United States is not a signatory to the Basel Convention.
In a paper published in 1995 by CEI, Ray Evans called the Basel Convention “Internationalism’s Greatest Folly.” That, of course, was before the Kyoto Protocol to the Framework Convention on Climate Change, negotiated in 1997.