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Trade Effect on Environmentalism and Poverty


This is a research paper about the effect of Trade on the environment. Much has been written about and said about the growing importance of trade in recent times and the way in which trade has contributed to the improvement of living standards and lifting people out of poverty. It has been estimated that around 1.5 Billion have benefited from the processes of globalization and the growth in international trade. However, the rapid increase in trade has had negative effects on the earth’s environment as is argued in this paper.

Growth in international trade

Ever since the General Agreement on Trade and Tariffs (GATT) came into effect in the ’90s and the World Trade Organization was established with a mandate to regulate and intervene in the disputes arising out of globalization, the world economy has been integrated in a way that has surpassed the earlier attempts. Though the world was integrated in colonial times as well, the process received a setback in the 21st century in the intervening period between the two world wars. It was only after the establishment of the Bretton Woods system that the world economy started regaining some of its interconnectedness (Dani 25).

It was only after the establishment of the Bretton Woods system that the world economy started regaining some of its interconnectedness. And the demise of alternatives to capitalism and the free market system ensured that all countries with a desire to alleviate poverty and raise the standard of living of the peoples would invariably turn to trade and commerce and utilize the “theory of comparative advantage” as proposed by the noted economist David Ricardo, “The principle of comparative advantage explains how trade can benefit all parties involved (countries, regions, individuals and so on), as long as they produce goods with different relative costs.

Hence, international trade depends on the ability of countries and people to exchange goods and services and participate in the modern equivalent of barter using money and other media of exchange to carry on the transactions. This leads to a race for the bottom as countries try to outdo each other in producing more and more goods and services at the cost of the natural resources of the world.

Effect of trade on environment

The growth in international trade because of the onset of globalization has had a negative effect on the environment. This is because of the way in which international trade is carried out. Trade requires the movement of goods and people from one place to another and this is carried out by shipping and flights over land and sea. Hence, the prerequisite of international trade is that there should be free movement of goods and people. This leads to the emission of carbon-laden gases into the environment that causes global warming (as would be discussed in the next section).

Apart from the effect of trade on climate change, the other dimensions around which trade affects the environment are in the way in which economies around the world produce the goods for export. Trade is a game where more is better and big is beautiful. Hence, in the race for profits and for producing more and more goods, countries deplete the resources of the land and this leads to deforestation and activities that range from illegal mining to exploitation of arable land.

A further effect of trade on the environment can be found in the way the rain forests of the Amazon and all over the world are being cut to provide for the material comforts of the population of the world. Because of the insatiable need for more wood and paper that is made from this wood, the rain forests are being cut at an alarming rate. This contributes to lesser lung space for the world and leads to a drop in the available oxygen content in the atmosphere.

Apart from these effects, the other issues pertaining to the disposal of hazardous waste that is exemplified in the way old ships are being sent to ship-breaking units scattered across the third world. These ships are often laden with toxic metals in their hulls and structures and the consequent breaking of these ships leads to contamination of the beaches and loss of marine life as well as aquatic organisms. Further, the chances of oil spills from the ocean-going ships lead to the same effects as those just discussed. In fact, there have been several instances of oil spills causing deleterious effects on the areas of the seas in which the spills have occurred (European Commission 13).

Trade and climate change

The most pressing issue of the current day and age is the effect of climate change. Climate change is caused by man-made emissions that result from using too much fossil fuel. As discussed in the sections above, fossil fuel is used to power ships and airplanes that are used for the movement of goods and people. Further, the activities needed for sustaining trade that includes production and consumption of goods across the world need a lot of fossil fuel for the same. Hence, with the increasing use of fossil fuels, the hazardous emissions because of the burning of these fuels add to the carbon emissions across the world.

It has been argued by many commentators that the Earth has a carrying capacity in terms of the usage of fossil fuels as well as emissions from the same and the environment of the earth cannot take these beyond a certain point (Lovelock 165). This point of view has been articulated, most notably, by James Lovelock who argued in his Gaia hypothesis that the earth is like an organism that has been stressed too much. In his other work, The Revenge of the Gaia, he makes the point that we might have already reached the tipping point as far as tinkering with the earth’s environment is concerned.

The present consensus is that we are very near to uncontrollable climate change and hence we should take steps to reduce the emissions as well as our usage of fossil fuels (Lovelock 120). There is an urgent need to reduce our dependence on trade and fossil fuels that power international trade. However, this is easier said than done and it would require a concerted effort on the part of everyone concerned as one cannot simply wish away trade because of the various benefits that trade brings to humanity.


I have discussed the effects of trade on the environment taking specific examples as well as the metaphor of Earth as Gaia (living organism). As I have argued throughout this paper, we have reached a stage where the inflection point is reached and we cannot go on carrying on with our present system of trade without doing damage to the environment. The issue here is the very survivability of the human species is in danger and hence we should act before it is too late (Martin 15).


Lovelock, James. “Gaia: the living Earth…” Nature 426 (2003): 769-770.

Lovelock, James. “Something nasty in the greenhouse.” Weather 60 (2005): 195-196.

Martin, James. The Meaning of the 21st Century. New York: Allen Lane, 2007.

Rodrik, Dani. Five Simple Principles for World Trade. New York: Harvard Press, 1999.

Trade and Environment. European Commission for Trade. 2008. Web.


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