When Environmental Protections Backfire at Home and Abroad

Developed nations often position themselves as leaders in green movements and legislate protections for their local environment. In some cases, this can have indirect negative consequences as environmentally-harmful behaviours are simply displaced abroad. This paper argues, from a political-economic perspective, that the local environment in developed states may also become neglected as a result of the same policies as new regulations diminish the economic value of local environments. I demonstrate this phenomenon in a series of simple game-theoretical models where stakeholders of environmental resources respond to the policies of two trade partner governments. The models show that environmentally-conscious governments might have their green policies backfire — resulting in environmental neglect if the preferences of those directly managing environmental resources are not in sync. Thus, in their attempt to hide trade behind green rhetoric, developed nations may be promoting environmental neglect at both ends of the trade route. Discussions of the wood industry in post-war Japan and the EU Forest Strategy for 2030 supplement the models.