Deck 18: International Environmental Agreements

Question 1

Environmental pollution is, for the most part, reversible, in the sense that it can be decreased if the appropriate steps are taken. What are the pros and cons, therefore, of using sustainability as a criterion for evaluating environmental policies?

Answer 1

Pros and cons of sustainability criterion of environment policy evaluation:
Sustainability criterion of environment policy discusses more about environmental quality including the concepts of economic vitality and social equity. Moving towards sustainability means people has to understand and realize the potential of improving the environmental quality rather than degrading stating socio-economic differences between countries.Sustainable equity for future generations requires that our today's economic activity should not degrade the capital upon which economic activity would depend further.Hence, sustainable equity at global level requires that the process of economic activity by the current generation in one part of the world does not degrade ecological, human, social or manufactured in any other part of the world, and should allow the future generation to choose another level, which could be either higher or lower level of environmental quality.

Question 2

When a multinational business firm from the developed world opens operations in a developing nation, should it be held to the environmental standards of its country of origin or to those of the country in which it is operating?

Answer 2

Decision of a MNC towards the emission standard of its operation in developing nations:
In general, it is suggested that emission standard should be same across countries, in order to prevent multinational business firms of developed countries to take operational benefits from the less restrictive environmental laws. This universal emission standard is based on the assumption of universality efficient level of emission and universality socially desirable environmental quality.However, in actual the socially desirable environmental quality varies from society to society, from region to region, from state to state and from one nation to another. Socially desirable environment quality of a developing country is expected to be relatively low and the environment regulation laws are expected to be less restrictive in nature than that of a developed country. This is because, developing countries would be more growth oriented.Environment regulation laws of developing countries reflect their socially desirable environment quality or their socially desired tradeoff between environmental quality and conventional output or their collective choice towards the environmental quality. Operation of firms under any other environmental law would result to worse off of the people of that developing nation.Hence, a multinational business firm of a developed country should choose the environmental laws of the developing countries while operating in that developing country.

Question 3

Suppose we introduce a new criterion, "administrative feasibility," for evaluating environmental policies in developing countries. How might this affect choices among different types of policies?

Answer 3

Impact of administrative feasibility on selection of environmental policies:
Generally it is argued that impact of public administration is relatively weak in developing countries, and thereby of stricter environmental law is hard to implement.
Often public and monetary policies in developing countries are targeted towards economic growth. Economic growth in developing countries is tracked trough growth in nominal GDP. Estimation of nominal GDP does not take into account the environment aspect.Thus, it is very difficult for the public administration to implement more strict environmental regulation laws in order to address serious environmental issues. Environment regulation laws vary according to the nature and complexity of an environmental problem. Environmental law includes technology standard, national standard, transferable discharge permits etc. to regulate the environmental problems.In developing countries implementation of cost effective and strict environment policies are not possible, because these types of policies would discourage the production of conventional output and thereby would affect economic growth.

Question 4

What is the relationship between economic growth, population growth, and environmental quality in developing countries?