Global Corporations in the Greenhouse: Developing Equitable Accounting Measures:

The declining role of the state in world economic af fairs and the increasing reach of transnational corpo rations to various parts of the world pose a serious challenge to the effectiveness and success of interna tional environmental treaties. With the further integra tion of the global economy and the rise of economic actors that operate and conduct their business without regard to national boundaries, cost-benefit analyses of economic development and environmental impact become problematic. For instance, are national states responsible for the pool of carbon emissions within their borders or do the foreign owners of carbon-emitting infrastructure and production or the consumers of goods manufactured by transnational corporations in Third World countries hold a share of the responsibility for the emissions created? These and other related issues, such as the promotion of equity and justice, are the main themes of this article. Corporations headquartered in Organization for Economic Cooperation and Development (OECD) countries are becoming increasingly integrated in the economies of the developing world as markets open up and as state-owned enterprises are privatized. Global institutionalized trade policy as promoted by the General Agreement on Tariffs and Trade, the World Trade Organization (WTO), World Bank, and the International Monetary Fund (IMF), has made so-called free trade the model pursued in most parts of the world. While the Clinton administration incessantly touts the merits of the new global economy, its proposed greenhouse gas emissions trading regime appears to virtually ignore this new reality. This conceptual disconnect has far-reaching implications for the management of environmental problems that are now presenting themselves on a truly global scale (MacNeill, Winsemius, & Yakushiji, 1991). A greenhouse gas accounting and trading regime based on emissions by nation states ignores the fact that transnational corporations dominate the global economy and that their activities are not bound by national borders. It downplays the environmental impact of the transboundary movement of goods to meet the consumptive needs of individuals throughout the world. Most important, a conception of pollution as existing solely within the borders of individual nations and ostensibly being created for the primary economic benefit of domestic citizenry does not address the stateless nature of global capital, as well as the primary user of that capital, the transnational corporation. In fact, such a conception denies the highly concentrated and polarized global political economy within which economic, and therefore environmental, decisions are made. Given the link between global energy and resource use, throughput and production, and economic growth and trade activity, we must begin to conceptualize global environmental impacts in the same manner. In addition, we must acknowledge the lack of economic democracy inherent in the global economy. Assigning a primary responsibility to nation states in managing global environmental pollution and emissions while simultaneously moving to usurp their power over economic and environmental decision making within their borders creates problems when attempting to address global environmental crises. We must acknowledge the lack of equitable distribution of political and economic power and decision making on