Horween: Free Trade Explodes Emerging Markets' Massive Pollution
This could not have happened without the WTO agreement and other bilateral trade agreements starting with NAFTA with Mexico that went into effect in 1994 and the WTO agreements with most of the emerging market countries in 1995.
China, after excruciating negotiations that gave China many advantages over the USA and Europe, entered the WTO in 2001. I might point out that I know of not even one bilateral trade agreement that we have entered into for the past 30 years that resulted in the U.S. ending up with a trade surplus with that country.
My theory contains a multiplier effect that no one else has ever mentioned. The effect is obvious. Not only do the electric generation plants in the emerging markets have less or no anti-pollution equipment on them but also they run on coal and have internal combustion engines running on diesel or gasoline.
As people moved to the cities for jobs in factories and then were able to buy motor vehicles the combination of more motor vehicles and electricity generation and construction equipment to build out the infrastructure created a gigantic increase in greenhouse gasses in the world.As the industrialized world sent more and more production to China and the rest of the emerging markets it kept its displaced workforce on generous welfare plans that kept them using carbon based fuels while they were unemployed. So, as the industrialized world did more to reduce its greenhouse gases, worldwide emissions grew worse. Industry runs on electricity. If you raise the price of electricity because of carbon taxes or very high cost wind power or solar power you drive production to the emerging markets like China that have low cost electricity and very few pollution standards on regular pollution. It was after most of the emerging markets entered the WTO in 1995, NAFTA in1994 and the Kyoto Protocol came into effect in 2005, that the specter of massive air pollution in China and Mexico and other emerging market countries came about. To reiterate the vicious cycle of more jobs, more production, and more vehicles on the road means more pollution of all kinds worldwide until the industrialized world wakes up and puts carbon taxes on the real polluters in the emerging markets and not on themselves as they have been doing since the U.S. has lost millions of jobs due to the massive movement of production to China, Mexico and other emerging market countries. However, our electricity rates are mostly lower than Europe's and we have not subsidized our conversion to alternative energy as much as Europe.
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