The relationship between free trade and the environment is one of the main issues of contention between environmental and ecological economics. Environmental economics assumes a positive relationship between free trade, economic growth and environmental policies. Environmental externalities may cause important damage. However, trade is not to be blamed for this. Instead, the fault lies with policy inadequacies at the national level. On the other hand, some ecological economists criticise the assumptions of environmental economics, especially the immobility of production factors and the positive correlation between income and environmental quality. They plead for measures to prevent deterioration of 'Northern' environmental standards in a `race to the bottom' due to `ecological dumping' from the South. In this paper, we argue that neither environmental economics nor 'Northern' ecological economics take into account the structural conditions determining the international trade System. Based on some new empirical evidence on material flows, we stress the notion of environmental cost-shifting. If physical and political ecology perspectives are adopted, a 'Southern' approach to the trade-and-environment issue may arise. © 2001 Elsevier Science B.V.
- Ecologically Unequal exchange
- Environmental Kuznets curve
- Environmental cost-shifting
- North-South trade