Trade and the environment: from a 'Southern' perspective

The relationship between free trade and the environment is one of the main issues of contention between environmental and ecological economics. Enviro nmental economics assumes a positive relationship between free trade, econo mic growth and environmental policies. Environmental externalities may caus e important damage. However, trade is not to be blamed for this. Instead, t he fault lies with policy inadequacies at the national level. On the other hand, some ecological economists criticise the assumptions of environmental economics, especially the immobility of production factors and the positiv e correlation between income and environmental quality. They plead for meas ures to prevent deterioration of 'Northern' environmental standards in a 'r ace to the bottom' due to 'ecological dumping" from the South. In this pape r, we argue that neither environmental economics nor 'Northern' ecological economics take into account the structural conditions determining the inter national trade system. Based on some new empirical evidence on material flo ws, we stress the notion of environmental cost-shifting. If physical and po litical ecology perspectives are adopted, a 'Southern' approach to the trad e-and-environment issue may arise. (C) 2001 Elsevier Science B.V. All right s reserved.