Globalisation and environmental sustainability: an OECD perspective

Recent debates about economic globalisation have focused attention on the environmental implications of that process. Some analysts see globalisation as a force for improving the environment, via technology development and diffusion, structural reforms, and the so-called "Kuznets curve" (in which rising incomes lead to increased demands for environmental quality). Others see the globalisation process as reinforcing deficiencies in existing environmental policies, leading to a general degradation in environmental conditions. This paper reviews both sides of this discussion, from the perspective of two aspects of economic activity often associated with globalisation - trade and investment liberalisation. Although the net environmental effects of trade and investment liberalisation are not yet fully understood, the paper concludes that, deregulation there is some tendency to attribute more environmental ills to the globalisation process than may be warranted.