Effects of Economic Globalization on Environment

Abstract

Competition of countries for the sake of growth and development has caused to depletion of natural resources without any planning. With the economic development and mostly globalization, environmental degradation has exceeded the national borders. Many countries perceived that globalization would open a window to have access to more capital flows, technology, cheaper imports, and larger export markets. But these countries did not have any idea that the benefits of increased efficiency will not go to all countries equally. In this paper, the effects of globalization on the environment and sustainability are analyzed by considering its economic costs in different types of environmental degradation. And then, discussion is provided how the negative impacts can be minimized and the positive impacts can be maximized with presenting the theory of Environmental Kuznets Curve. However, it is noticed that the aim is not to reduce pollution damages to zero but reduce them to socially optimal levels. This optimal level is obtained where the marginal social benefit of the decreasing of the pollution equals the marginal social costs of the efforts to reduce pollution.