On the environmental externalities of global trade

In the study of international political economy, there is little discussion on how economic development affects the global environment. Yet natural degradation can be one of the most pervasive and longest lasting consequences of development. Too often these consequences are simply catalogued without sufficient consideration given to their social, political and economic causes. Global deforestation, this study's litmus test of environmental lateral pressure, is examined in relation to domestic GNP, population growth, and a variable constructed for this study, namely trade-connected GNP, which accounts for the trade effects among nations. This model specifically addresses the ongoing debate between economists and environmentalists over the costs and benefits of free trade. Economists defend free trade by citing evidence that domestic GNP increases, spurred on by the gains from trade, reduce environmental degradation as richer countries become better able to address such concerns. This study replicates these results, but then it tests trade effects directly and finds that they increase rather than decrease patterns of global deforestation.