Trading up and governing across: transnational governance and environmental protection

Abstract

This article explores the adequacy of international governance mechanisms to address environmental issues. It examines the impact of increased global economic integration on national and regional environmental standards, the role of market mechanisms in facilitating the dissemination of environmental standards from greener nations to less green ones and the impact of international agreements on trans-border environmental problems. It argues that current regional and international governance mechanisms are adequate to enable nations which have the resources and the commitment to improve environmental quality to do so, either on their own or in cooperation with other nations with similar values and resources. Fears about a 'Delaware effect' regulatory race to the bottom are unwarranted: competition from nations with weaker environmental regulations has not prevented richer, greener nations - where the majority of world production occurs - from strengthening their own regulatory standards. On the contrary, there is substantial evidence for a 'California effect': nations are increasingly adopting the standards of their richer, greener trading partners. Trade agreements and environmental treaties have also played a critical role in strengthening many national environmental practices. However, current governance mechanisms do not adequately address regional and global environmental problems which require substantial changes in the behavior of poorer and less green nations.