Trade and the environment is another issue high on the international agenda, particularly since the formation of the World Trade Organization in 1995. Whether trade liberalization is good or bad for the environment is hotly debated, and questions of environmental protection and competitiveness are of great concern to developing countries. A significant issue is whether polluting industries and firms will move to countries where environmental legislation is poor or weakly enforced. Indicators comparing exports to imports of pollution-intensive sectors can speak to these questions. Indicators relating growth in incomes to the demand for polluting transport fuels provide an important link between growth and the environment.
Genuine saving Achieving sustainable development is a process of creating and maintaining wealth.
For this to be a satisfactory definition, however, it is essential that wealth be broadly conceived to include human capital, natural resources, and the natural environment. This is a comprehensive measure of a country s rate of saving after accounting for investments in human capital, depreciation of produced assets, and depletion and degradation of the environment. Genuine saving departs from standard national accounting conventions in several ways, notably by expanding the range of assets being valued. Deducting pollution damages, including lost welfare in the form of human sickness and death, is also necessary if it is assumed that society is aiming to maximize welfare. Table 3a provides genuine saving estimates for selected countries in Latin America and the Caribbean.