Of green and greenbacks

By Abhijit Mukhopadhayay
Last Updated: Saturday 04 July 2015 | 03:16:47 AM

TRADING UP: CONSUMER AND ENVIRONMENTAL REGULATION IN A GLOBAL ECONOMY · David Vogel · Harvard University Press · 1995

consumer protection and environmental regulations are quite an important part of the economic agenda of developed countries today. It is the pressure created by activists, environmental groups and various non-government organisations that has brought about this shift. But in this age of free market economy and trade liberalisation, the dialectical relationship between free trade and consumer and environmental protection has become a highly contentious issue all over the world.

Confrontation emerges from the fact that regulations hamper the process of free trade. Although this may be true, protection or regulation does not always slow down the process of free trade. This is because the economic strength of the 'greener' nations, helps in the improvement of the regulation standard in other countries without deceleration in free trade. While the author calls the former phenomenon the "Delaware effect", the latter is called the "California effect". The former is associated with "baptists" and the latter is linked with "bootleggers". The environment would benefit if the actions of the two were to be unidirectional, even though they may be backed by different motives. As the author points out, "An important reason for the lack of success of anti-cigarette lobbies in the us was that no domestic industry stood to benefit by discouraging exports of this product: there were baptists but no bootleggers."

Judged from the point of view of performance, the European Union ( eu) seems to have been the most successful in harmonising regulatory standards and free trade. "The eu has become a vehicle for exporting the environmental standard of Europe's greener nations to the rest of the continent." The key to the eu 's ability to accomplish this lies in the degree of authority it has been able to exercise over both the trade and regulatory policies of its member states. "The removal of non-tariff barriers and the maintenance or the strengthening of health and safety regulations requires a strong international authority. Unlike the General Agreement on Tariffs and Trades ( gatt) , the eu has the authority to centralise decision."

But, as the author appropriately rationalises, the political colour of the issue cannot be missed: "Were the eu 's richest and most powerful nations not also among its greenest, it is highly unlikely that the organisation's commitment to economic integration would have resulted in a steadily upward trend in environmental standards. Indeed, it might well have relaxed them."

The book should be praised for its comprehensiveness with respect to the chronological details given and the explanations inserted at the right places. But, as a political scientist, Vogel could have made 'politics' his rallying point. He has analysed the politics of protectionism, but too much emphasis on details has made the book history-oriented. The book is rather well organised, but it would have been better if the case-studies had been approached from a more general, macro level, following which all the threads had could have been interwoven rather than having been separately taken up. But, it is all the same a well-researched, praiseworthy and pioneering effort that would be of use to a student of the environment.

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