Academic journal article Environmental Law

Making Trade and Environmental Policies Mutually Reinforcing: Forging Competitive Sustainability

Academic journal article Environmental Law

Making Trade and Environmental Policies Mutually Reinforcing: Forging Competitive Sustainability

Article excerpt

The authors assert that environmental and international trade policies must become mutually reinforcing so that environmental policies do not distort trade flows and economic activities do not continue in an unsound and unsustainable manner. Competitive sustainability is the mechanism for achieving sustainable development by harmonizing domestic and international environmental standards through the use of competitive forces which reward the cleanest and most efficient economic actors. An international system of incentives and disincentives will create a mutually reinforcing mechanism for directing trade and environmental policies toward improving the worldwide standard of living.

1. INTRODUCTION

Former U.S. Ambassador to the General Agreement on Tariffs & Trade(1) Michael Smith astutely noted that the environment is the trade issue of the 1990s, and that, unless a considered solution is developed to allow constructive interaction between trade and the environment, each of these vital policy spheres May find themselves compromised. Put in "Smithese," "[t]he question is whether you want to lay down in front of the train or get in the cab and steer it."(3) Steering in the preferable approach.

As the contributions to this issue demonstrate, the steering process for trade and environment policy indeed has begun. The dialogue is rapidly evolving from its early emphasis on potential conflicts between trade and environmental policies to a more positive attempt to minimize or eliminate frictions between these two policy spheres. Though this evolution is positive from both trade and environmental perspectives, it simply does not go far enough. We need to rethink the course we want to steer. True advancement of both ecological and economic imperatives will occur only when trade and environmental policies are mutually reinforcing.(4) "Competitive sustainability" defines a mechanism for realizing sustainable development through the "upward harmonization" of domestic and international environmental standards, using competitive forces to create a level playing field for commerce at consistently higher levels of environmental and social protections that reward the cleanest and most efficient economic actors for their efforts.(5) The goal here is not to overburden economic activities, but to put them to work for the environment. By focusing economic activities, through incentives and disincentives, in directions that yield both economic and environmental benefits, these economic activities can become engines to drive standards of living - broadly defined to include economic, environmental, social, and health stability and security - upwards.

A. The Untenable Status Quo

Environmental policies have long relied on trade sanctions to advance their goals,(6) and trade tribunals nearly a decade ago found environmental laws in conflict with trade rules.(7) Yet, it was not until the Tuna-Dolphin decision(8) that trade and enviromental policies were perceived as significant threats to each other.(9) Only in the wake of the Tuna-dolphin panel's sweeping pronouncements did trade advocates come to fear environmentalists and vice versa. There has been no rush, however, to use environmental policies to disrupt the trading system or to use trade policies to undermine environmental protections. Thus, the current ecological and economic state of the world - the status quo - is a product of coexisting trade and environmental policies.

Yet, even a cursory glance at the Earth's "vital signs" shows that this status quo is simply not working.(10) Environmental degradation, driven principally by economic activities, is already occurring at a rate and scale that places both ecological and economic system at risk.(11) Take, for example, the threat of global warming caused chiefly by carbon dioxide emissions.(12) Assuming the present growth rate in greenhouse gases remains constant, we may have already committed the planet to a mean global warming of three to eight degrees Fahrenheit (1. …

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