Economists say not always, asserting that time and resources may be better spent defining and carrying out sound domestic environmental policy. Environmentalists caution that free trade can be synonymous with sustainable development only if, in the case of natural resources, environmental costs are internalized through such mechanisms as taxes and tradable pollution permits. To shed light on these issues, the World Bank hosted an international conference. The effects of growth and trade liberalization on environmental quality are ambiguous. But where appropriate environmental policies are in place, where growth is associated with environmentally friendly technological change, or where trade liberalization reduces environmentally destructive economic distortions or increases productive efficiency, the effects of increased growth on the environment are likely to be positive.
Toxic emissions continue to rise worldwide.
Again, this is a compositional effect. But the contrast between open and closed economies may be even more pronounced if the relative toxic intensities within industry were taken into account. There is some evidence from the United States that when interest groups link demands for protection from import competition to environmental arguments, they enjoy a higher success rate in securing trade restrictions. Pollution abatement and control expenditures by firms do not appear to have had a significant effect on competitiveness in most industries, since these expenditures represent a modest share of total costs. This suggests that national differences in environmental regulations have not been a major explanatory factor in the changing international location patterns of dirty industries.