What impact does globalisation have on the environment Essay

What impact does globalisation have on the environment - Essay Example tinational enterprises (MNEs) can profit substantially from the consequent cross-country variations in environmental regulations by transferring the capacity of production to those nations most agreeable to make use of loose environmental policies as an encouragement for investment. Confronted with the possibility of an industrial flight, the debate goes on, countries are compelled to join a ‘race to the bottom’ and develop into ‘pollution havens’ or compromise high incidences of unemployment and the attrition of their tax base.2 In a sense then, globalisation weakens the ability of the government to safeguard the environment through corporate behaviour regulation. Conversely, advocates of globalisation argue that lower trade barriers and FDI motivate corporations to move environmental technologies as well as management systems from nation-states with more stringent environmental policies to developing nations, which cannot manage to acquire environmental technologies and capacities. The failure of the government to safeguard the environment, it is proposed in this assumption, could also be improved through self-regulation of firms’ environmental conduct in developing nations.3 Self-regulation â€Å"refers to a firm’s adoption of environmental performance standards or environmental management systems (EMS) beyond the requirements of governmental regulations.†4 Globalisation has the capability to boost pressures in self-regulation in various ways. Primarily, globalisation raises the investment of MNEs in developing nations wherein their subsidiaries can self-regulate their own environmental conduct more than that of the capacity of local firms.5 Moreover, MNEs can move their more sophisticated environmental technologies as well as their management systems designed to adjust to the stricter regulations in developed nations to their subsidiaries. Also, MNEs confront demands from interest groups to perk up their international environmental