Jump to:Page Content
Increased trade does not have to undermine environmental protection, Harvard Kennedy School economist Jeffrey Frankel said yesterday at a lunch seminar hosted by the Mossavar-Rahmani Center for Business and Government’s Regulatory Policy Program.
Speaking on “The Global Climate and Global Trade,” Frankel, Harpel professor of capital formation and growth, argued that the environmental impacts of increased trade are mixed. Trade may actually lessen SO2 concentrations, he said, while potentially increasing CO2 emissions in the atmosphere.
Because trade may be both harmful and beneficial for the world’s environment, Frankel called for an effective multilateral trade agreement that takes into account both economic and environmental concerns.
Seeing a possibility to build on the relative successes of the Kyoto Protocol, Frankel cited “international trade for emissions permits” as a necessary feature of a successful post-Kyoto regime. He called international trade for emissions permits a “win-win situation that benefits both the environment and economy.”
Frankel further argued that effective regulation will require a multilateral approach because, “if each country imposes border measures in whatever way suits national politics, they will be poorly targeted, discriminatory, and often disguisedly protectionist.”
Frankel identified a number of ways in which “the trade and climate regimes can be made to work in harmony,” including working to ban fossil fuel subsidies, liberalizing trade in climate-friendly goods and services, and/or allowing subsidies for adaptation of facilities to environmental regulations. Approached properly, he said, trade does not need to be solely detrimental to environmental protection.
The Regulatory Policy Program’s New Directions in Regulation seminar series is held throughout the year, and is focusing this semester on issues of global climate change. Since 1998, the series has hosted more than 100 leading scholars from Harvard and around the world to discuss emerging trends in regulation.