Trade & investment

Trade is often the best way to improve the environment

  • 9 October 1999

The lead editorial in The Economist of 9 October 1999 argues that the claim by green activists that free trade in general and the World Trade Organization in particular are ruining the global environment is "plain wrong" as a general statement.

The Economist says: “Far from damaging the environment, trade is often the best way to improve it.” The editorial goes on to state that protecting the environment is as legitimate a goal as free trade although in some specific cases trade can indeed damage the environment.

“Yet in such cases the right response is to tackle the root cause of the environmental damage – and not to stop trade.”

The editorial says: “All this makes it doubly important to explain why trade generally benefits the environment. The reason is that it boosts economic growth. As people get richer, they want a cleaner environment – and they acquire the means to pay for it.

“Granted, trade can increase the cost of the wrong environmental policies. If farmers freely pollute rivers, for instance, higher agricultural exports will increase pollution. But the solution to this is not to shut off exports: it is to impose tougher environmental laws that make polluters pay.”