Published on July 23rd, 2008 | by Jennifer Lance1
Is Free Trade the Solution to Climate Change?
Globalization is a fact of modern times, and supporters of “free trade” tout it is good for the US economy and supports world peace. Given that it will take a global effort to solve the climate crisis, free trade has a new spin: The solution to global warming. In fact, Republican presidential candidate John McCain thinks that a free-market provides solutions to climate change, such as capping carbon emissions, which contradicts the very notion of free trade’s elimination of government imposed regulations. Even Rush Limbaugh’s not buying free trade is the solution (mostly because he doesn’t believe in global warming).
Free trade puts corporations and profits first, ahead of environmental and social concerns. McCain thinks this is not a problem, “As never before, the market would reward any person or company that seeks to invent, improve, or acquire alternatives to carbon-based energy…” Will the market reward alternative energy companies with profit? The US and EU are already calling on the elimination of tariffs for goods and services that protect the environment and fight climate change to help these companies profit.
At first glance, this sounds like a good idea to spur a green economy, especially considering the EU states that trade is growing twice as fast in green goods and services than the rest of global trade. But what about the social and environmental consequences of free trade? Producing solar panels in low-wage countries will lower their production costs and increase company profits, but what about assisting these domestic companies in these countries to develop the technology themselves? Plus, you can’t ignore the environmental impact of shipping these green products thousands of miles in cargo ships or the weaker environmental regulations in these countries. Of course, many believe free trade can fix these lax regulations by imposing tougher environmental laws, such as McCain’s proposal. Some even argue these weaker laws are a result of tariff-imposed trade that impede upon profit, as countries fear jobs will move abroad to countries with less environmental regulation, a term called “eco-dumping“. Isn’t this what we have seen in the US since NAFTA’s approval?
Free trade is not the solution to the climate crisis. A green collar economy goes beyond installing solar panels to developing these technologies domestically, paying fair wages, and providing health benefits. If this is not possible, then fair trade, rather than free trade, principles should be used abroad. What good is it to save the environment, if we don’t save the humans? Taking advantage of people in third world countries is not the solution. Some economists argue that once these countries reach a certain level of wealth, they will demand a cleaner environment. This may be true, but free trade won’t stop companies from eco-dumping in the next country with weaker environmental laws. The link between poverty and environmental degradation is clear, so we must eliminate global poverty. Free trade focuses on companies and profits, thus ensuring it is not the answer to our current climate crisis.
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