Directs and Indirects Effects on Environment

For over a quarter century, researchers have recognised the potential for increasing
trade to negatively impact the environment. Highly publicised events, such as the fate of
the Khian Sea,2 the leak of an internal World Bank memo signed by Chief Economist
Lawrence Summers (in which Summers appeared to urge World Bank economists to
encourage pollution-intensive industry migrate to developing countries3) and riots at
the 1999 World Trade Organization meetings in Seattle brought the question of whether
the surge in international trade is good or bad for the environment onto the world stage.
Research into the net effect of globalisation on the environment has matured,
although there remain many outstanding questions. Moreover, there has been little or no
effort at linking up the two broad schools of thought on the direct and indirect effects of
globalisation on our natural environment. The direct effects include emissions and
environmental damage associated with the physical movement of goods between
exporters and importers. This includes emissions from fossil fuel use, oil spills and
introductions of exotic species. At the same time, growth in trade and foreign direct
investment (FDI) has numerous indirect effects. These indirect effects are often classified in
scale, composition and technique effects.