Environment and Globalization

1. ENVIRONMENT
AND GLOBALIZATION
Nicolas Foucras PhD
TEC de Monterrey
nicolas.foucras@itesm.mx

2. Activity:
• Form groups of 3
• Answer the questions (15 minutes):
• What are the reasons to explain the environmental
degradation?
• What are the measure we should take?
• Many DCs consider that it is unfair to oblige them to
respect international commitments on this issue. What do
you think?
•Make your presentation

3. Current Globalization is based on the myth that: economic growth
creates social progress and material accumulation leads to
happiness
=> GDP and consumption is the priority for all actors
GDP per capita is growing exponentially everywhere
This trend leads to an increasing need for energy consumption
and intensive use of natural resources causing a worrying
degradation of the environment

4. Actors participating directly/inderectly
to the degradation of the environment:
• Global industry
• Intensive and export-oriented agriculture
• Bank financing these activities
• Governments and IOs (WTO)
• Individuals are the main responsible because all these
actors are a product of our daily behavior

5. • MNFs know how to escape national legislations, to take
advantage of weak States or how to use the lack of global
governance
• Ex.: Many create companies in Tax havens for maritime
activities => it allows fleeing from justice due to the total
secrecy (convenience pavilions)
Example: Prestige (Super-tanker) which caused an oil spill in 2002; it
was impossible to determine the responsibility in this case
• It had Bahamas pavilion
• Ship: Property of a Liberian company
• Merchandise registered in Switzerland but belonging to a
Russian holding registered in Liechtenstein
=> nobody was guilty and paid for the pollution caused and
economic damaged

6. • Unique goal for the WTO : proper functioning and growth of
the international trade => to eliminate all the obstacles
affecting the trade
Does not consider environmental impacts (as well as social
impacts): it is a major defect
Many countries and important global players (MNFs and
Banks) are opposed to the inclusion of environmental
rules because it will increase costs/prices => it will affect the
competitiveness, growth and profitability
Problem is that without any global rules, the liberalization of
commerce (globalization) allows the relocation of polluting
activities to countries with weak environmental, labor and
taxation legislation
=> There is a race to the bottom between DCs to attract FDI
(they are willing to sacrifice normative legislation)
=> For many analysts, it creates an environmental dumping
(or Eco-dumping)*

7. Environmental dumping (or Eco-
dumping)
MNFs (global value chains) seek to establish subsidiaries in
countries that have less strict environmental laws or
environmental laws that are not strictly enforced
It allows:
1. To reduce the costs of production
They do not assume certain costs they will have to take
into account in their own country or any other IC
MNFs locate polluting activities in DCs

8. 2. To transfer waste (household waste, industrial/nuclear
waste, electronic waste etc.) from one country to another
(has been referred to “transfrontier shipment” of waste)
=> Governments as well are using this mechanism
• This practice allows cheap disposal or recycling of
waste without the economic regulations of the
original country
 It improves the competitiveness and it reduces
the costs of goods and services for the final
consumer
 Economic benefit for MNF and global consumer
• Many waste are hazardous wastes => they can
(1) cause potential health risks to humans
(2) affect the environment (Digplanet 2015)

9. 2 examples of “transfrontier shipment” of waste
(Digplanet 2015)
• In 2005, 60 containers were seized by Dutch authorities on
their way from UK to China. The containers were supposed
to be for paper but actually contained household wastes
• In 2005, French warship, the Clemenceau, was sold to India
to be scrapped. The Indian Supreme Court ruled that it could
not enter Indian waters due to the high level of toxic waste
(asbestos found on the ship) =>French Govt was forced the
to take it back
• In 1992 the Basel Convention was enforced to regulate
“transfrontier shipment” of waste (there is at least 8 million
tons of hazardous waste imported and exported every year)
(Basel Convention 2009)

10. • Problem is that Contamination does not generate
costs (or very limited costs)
=> Consequence: costs are transferred to populations in
DCs or to future generations
• Immediate benefits continue to control decisions and
are much more important than future costs

11. • Some governments of DCs are specializing in very polluting
activities (to meet the global demand): Advantage: they can
generate very high profits but negative consequences in terms of
environmental and social impacts (ex.: mining industry or export-
oriented agro-business)
Ex.: UNEP [United Nations Environment Program] and
UNESCO published a report (2011) over the dangers of
international specialization highlighting the case of Indonesia
and the production of oil palm
Following the current trend: 98% of the tropical jungles might
disappear by 2022
There is a massive disappearance of primary trees that represents
a “worldwide catastrophe” for human beings as well as for local
species
Purpose of palm oil: production of biodiesel in Europe => EU
fulfill the international commitments about global warming they
have made but at the expense of the deterioration of the situation

12. Governments:
• Lack of commitment; it is a dilemma for them: Govt which decides
to commit itself will affect/reduce competiveness of its economy:
• National firms and FDI will have to assume costs to respect
environmental rules that firms in other countries will not have to
respect
 probability of relocation of productive activities will be high
followed by the problem of unemployment
• Many DCs do not want to comply with international rules (Kyoto
protocol) (BRICS)
• Reason: they consider themselves as DCs => they do not want to
affect their economic development
• Many emerging countries consider that the environmental
commitment represents a setback for development
• DCs (specially BRICS) consider environmental policies of the ICs
are similar to protectionist measures

13. • Lack of international organization with sanctioning power
(there is in EU however European actors can easily escape
exporting waste or setting up polluting activities outside Europe)
• Gvts are also guilty because they promote consumption to
support the national industrialization and GDP (promote the
acquisition of certain assets such as house, car, consumer
electronics, etc.)
They favor consuming society and therefore energy
consumption increase
• Gvts transfer wastes to DCs (household wastes, toxic wastes,
nuclear wastes…) (Gvts from DCs are equally responsible;
frequently it is the decision of an official => it feeds corruption)

14. Individuals
• Our lifestyle and daily decisions allow MNFs to maintain
their polluting activities
• We are clients of the MNFs and we seek the lowest price
=> MNFs will seek to reduce costs at all costs
• The worst part is that we do not feel guilty and we
accuse/blame MNFs (we forget that supply meet demand)
• May be we are alert however there is a feeling of
powerlessness: “my behavior does not change anything” 
we do not make the link between our behavior and
environmental degradation
• What is guiding our decisions for consumption?
• Idea that environment is at the service of our individual project
• Need of accumulation is internalized (it is an invisible hand that
guide us unconsciously) (we do not know the limits)

15. • Individualism leads to consumerism => we exist
through the consumption (“I consume therefore I
exist”; we do not exist anymore through the relation
with others, with the environment or with the divine). It
is like a refuge
• Change of lifestyle is not accepted (everyone agrees
about environmental protection but nobody wants to
change lifestyle; moreover, it could lead to a
social/economic exclusion or higher costs) (Balaam
and Veseth)
• In many societies there is an absence of social
sanctions in relation to the bad behavior

16. • The root of the problem comes from actors’ behaviors
(governmental agencies, productive actors, banks,
individuals) which are a product of the institutionalized
paradigm created after the 2nd WW and
maintained/consolidated by individuals/consumers:
• A Paradigm of behavior based on a concept of
“development” (interpreted as material growth) has been
institutionalized/crystalized (do not forget that “the true” is
a social construction)
• This paradigm is guiding our daily decisions leading to
the externalities of the globalization: environmental
degradation but also migration, violence and criminal
networks, poverty and exclusion, unemployment,
disappearance of local identities…. (see “Darwin´s
Nightmare)

17. • Everyone is responsible and therefore we have to be part of
the global solution which will require probably a complete
change of behavior/paradigm
• Problem: nobody wants to leave its comfort area and to be
excluded from the social/economic dynamics that are very
materialistic

18. Harlem Brundtland was in charge of the “Brundtland
report” on Sustainable development: it highlights the
need to incorporate the environmental degradation in
the development model (published in 1987 by the World
Fund for the Environment, WB)

19. Some actors seeking to achieve comprehensive change
of paradigm
United Nations for Environment Program (UNEP; 1975)
• “Environmental voice” in the UN
• HQ in Nairobi
• Created after the Stockholm Conference (1972): international
community realized the need to integrate development and
environment
• Goals:
• To Coordinate environmental policies
• To promote consensus over environmental objectives
• To Organize summits (Rio 1992: Johannesburg 2002; Copenhagen 2009;
Paris 2015): reduce emissions of polluting gases which have
greenhouse effects
• To facilitate commitments (treaties, conventions, protocols, agreements)

20. Environmental NGOs are emerging/consolidating with
increasing analytical and critical capacities
• They have more and more possibilities to participate into the
global policy networks (G20, UN system, WB, Davos, etc. ); it
means that:
• They have more visibility => They have to assume a lower cost to
disseminate their ideas
• Their ideas have more political weight
• The context is much more proactive and collaborative with formal global
policy networks => many NGO go from anti-globalization to alter-
globalization offering alternative solutions to those from the market

21. Scholars try to raise public awareness
• Publications and statements
• Consultant for Governmental/international
agencies/NGO
• Universities create Academic programs
Sensibility and conviction of some leaders
Communication, movies, documentaries

22. We observe notable changes:
• National/international mood is changing: consumers and
citizens are much more vigilant and they also ask for effective
mechanisms to ensure a company's and Gvt’s accountability
for its environmental and also social impact
Gvts and Firms have to take more and more into account
the environment: they have to do so to avoid a political or
economic cost (=> competitiveness of the firms include more
and more environment)
This change will dependent upon the level of social awareness
• International agreements (even the FTA) increasingly consider
the environment
• Environment is now perceived as a national security matter
in all the ICs and any DCs; it is part of the development
model

24. Historical agreement between Xi Jinping
and Obama (2014)
• It was concluded one year before the Paris Summit
• Both reached an agreement to reduce greenhouse gases
emissions
• It is a good news due to the (1) growing competition between
the 2 powers (agreement will establish environmental limits/rules
to their competition) and (2) because they are the most
important CO2 emitters
• China and the USA = 42% of the world’s CO2 emissions

25. China
• Established a peak objective for emissions by 2030 (with
“intention of achieving it as soon as possible”)
• First time China makes a commitment to a specific date
• China is the country that produces the most important
quantity of polluting gas since 2006
• China is responsible for 50% of worldwide coal consumption
• Traditionally it did not want to be considered as an ICs to avoid
any commitment => big step forward

26. USA
• They make the commitment to reduce between 26-28%
of its CO2 emissions before 2025 (reference year = 2005)
• Traditionally (since 1990s) USA did not want to make
any commitment without the involvement of all the
big competitors (including China). This is the main
reason why they did not ratified the Kyoto Protocol
• There was a strong opposition in Congress; according
to Mitch McConnell (Republican leader in the Senate):
• This is non realistic agreement
• It will affect competitiveness and employment
• It will increase prices for consumers…

27. Consumption of energy in USA

28. In 2006 China overtook USA as the biggest
CO2 emiter

29. Biggest CO2 emitters: slowing down in USA/EU but
increasing in China (which is meeting US demand and
Chinese demand) and many are concerned about India

30. CO2 emissions (2012)

31. CO2 emissions during the period 1900-2004
The industrial development of USA and Europe is due to fossil
energy consumption (cheap energy)

32. We are still depending on fossil energies
(oil, gas, coal)
• Global economy depends on these polluting resources
• Economic, social and political structures depend on the access
of these resources (as well as competitiveness)
• Current global hierarchy depends on oil access (since the XX
century). Countries are still fighting to have access to oil
• Energy demand moves to DCs (South Asia); it is due to:
• Relocation of productive activities from ICs to DCs
• Growing consumption in DCs following the development model of
the ICs
• The question now is: How to say to DCs that they will not be able
to base their own development on green energy (expensive
energy)

36. Coal production in the world: increasing
demand from China

37. Renewable energy development:
More and more public projects developed by ICs and DCs => there is
governmental voluntarism (this decision does not follow the logic of the
market): it meets a urgent necessity to change the model and it also
meets growing pressures from the international mood

38. END

39. Kyoto Protocol: Absence of USA, Canada,
BRICS, MINT
• Orange: (USA) no commitment
• Red (Canada) left the protocol (Back down in 2011 pretext of no inclusion
of India and China)
• Purple (ex USSR): does not fulfill requirements to join
• Deep green (EU, Australia, Turkey) accepted commitment