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Free trade negative impacts on the environment
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When first presented in 1991, the Environmental Kuznets Curve offered an explanation for the relationship between economic growth and environmental quality (Grossman & Krueger, 1991). These early estimates indicated that the quantity of sulfur dioxide, an important environmental indicator, improved as income and consumption increased. These findings were contradictory to the beliefs of the time as, prior to this research, it was commonly assumed that increasing economic development and capitalism would continue to harm the envirnoment and destroy natural resources. The Environmental Kuznets Curve simplifies the relationship between collective behavior, such as changes in a nations wealth into a two-dimensional graph. Since these initial findings, there has been significant research into determining whether or not this relationship exists. Do all factors in environmental quality systematically correlate with economic development? Of course, there are many other variables that may impact environmental quality, however, many of these variables are endogenously embedded in the model and are related to the development of society as the economy evolves. For instance, does the EKC model fails to determine whether the solution to preventing environmental decline is more economic growth; or if pollution is simply an unfortunate output from economic development that we are responsible for abating once the benefits from production outweigh the negative environmental and human health costs.
The American economist Simon Kuznets is famous for winning the Nobel Prize in 1971. He is primarily known for his research demonstrating the relationship between income inequality and per-capita income. The theory suggests that as an economy...
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After three years of debate NAFTA was established in 1994. Fears concerning NAFTA included job creation, loss and transfer, wages and infrastructure. (Ganster/Lorey 188-189) However, with the implementation of NAFTA the economy grew. Ganster and Lorey reveal that bilateral trade increased by $211.4 per year from 1989 to 2004. Commerce grew by 20 percent in the first six months of 1994. There were advantages and disadvantages of NAFTA, nevertheless, NAFTA “intensified the integration of the two economies rather than distancing them.” (Ganster/Lorey 190)
Wealth inequality did not always exist in human life. In fact, “Human life have not only been changed, but revolutionized, within the past hundred years” (Carnegie 1). There used to be
P = preliminary data.Note: Data in this table are revised from the data contained in the previous EIA report, Emissions of Greenhouse Gases in the United States 1998, DOE/EIA-0573(98) (Washington, DC, October 1999).Sources: Emissions: Estimates presented in this report. Global Warming Potentials: Intergovernmental Panel on Climate Change, Climate Change 1995: The Science of Climate Change (Cambridge, UK: Cambridge University Press, 1996).
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“We are consuming the Earth’s natural resources beyond its sustainable capacity of renewal” said by Herman Daly, Beyond Growth, Boston 1996, 61[1] .
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In traditional opinions, environmental protection and economic growth are mutually contradictory. Economic growth is a high environmental cost, and protecting the environment will limit the economic growth. The reason of contradiction stems from the inappropriate understandings among development, economic growth and environmental protection. In fact, economic growth could have a harmonious relationship with environmental protection.
Ayres (2008) advances the concept of ‘sustainability economics’, which deals with the issue of maintaining economic growth while paying special attention to environmental concerns of energy utilization and resource exhaustion, especially carbon fuel consumption and its relation to climate change.
Economic growth also play a role in reducing debt to GDP ratios. Therefore, money can be spent on protecting the environment. With higher real GDP a society can dedicate more resources to promoting recycling and the utilization of renewable resources investment. Economic growth encourages investment and therefore encourages a virtuous cycle of economic growth.