Political leaders from both Left and Right are nowadays united about
the need for further liberalisation of the world’s trading system. But
The New Protectionism by Colin Hines and Tim Lang serves as a timely reminder
of the growing lobby of free trade sceptics, who feel disenfranchised by
the current political consensus.

According to a study released last September by the World Bank and the
Organisation for Economic Cooperation and Development, the successful completion
of the round of trade talks, the Uruguay Round, held in December, will add
a staggering $213 billion to world income by 2002.

But among those protesting against this free trade orthodoxy, are environmental
groups who point out that trade liberalisation sometimes has the effect
of exporting pollution to countries with the lowest environmental standards.

Under the General Agreement on Tariffs and Trade, governments cannot
impose environmental import taxes or bans on goods made by polluting industries,
or on products such as timber harvested unsustainably in another country.
Many environmental groups believe that the new Multilateral Trade Organisation.
proposed in the Uruguay Round, should be equipped with a mandate to pursue
sustainable, rather than unrestricted, trade.

The unexpected length of the Uruguay Round, which kicked off in 1986
has given GATT’s opponents ample opportunity to collect their thoughts and
launch campaigns against free trade.

In The New Protectionism Lang and Hines endeavour to draw together the
whole range of arguments against trade liberalisation. Hines, an environmental
campaigner, injects his experience of the trade-environment debate, while
Lang, director of an American campaign called Parents for Safe Food, brings
an agricultural and food safety perspective. The New Protectionism addresses
everything from governments losing the right to set national standards on
pesticide residues in food, to the treadmill faced by some developing countries
that export agricultural products to service their debts.

Usefully, the book gathers together the multitude of environmental and
developmental issues linked to free trade. But it also acts as a political
vehicle to promote the idea of a ‘new protectionism’. Lang and Hines conclude
that shipping goods across the globe is often ‘ecological madness’ and should
be avoided where practical. They propose that regional self-reliance should
be the goal to minimise the distance goods travel.

I could not help but feel a little cheated. If Lang and Hines are opposed
to the very idea of moving goods around the globe, how seriously should
we take their analysis of GATT’s diverse impact on the environment and development?

Julian Rose is an environmental journalist.

‘No remedial work of any substance is being undertaken because there is no
money,’ says Richardson. In April, the European Bank for Reconstruction and
Development published its strategy to repair the damage in Croatia. But only
one project – to restore air traffic control in the region – is nearing
approval. ‘We don’t have any environmental projects in Croatia as yet,’ says
Keiko Itoh, of the EBRD.

Richardson argues that the international Danube Environmental Programme,
which plans to clean up the Danube basin across Hungary, Romania, Bulgaria,
Moldavia and the Ukraine, will be frustrated because of the enormous input
of pollution from Croatia and Bosnia. The ecology of the Danube delta and
the Black Sea fishing industry are also threatened, he says.

There are scores of abandoned industrial sites in Croatia. But in Bosnia,
which UNIDO has yet to visit, the bombardment of industrial towns has been
much heavier. Tuzla, with its large petrochemicals and chlorine works, is of
particular concern.

In the Croatian town of Osijek, 1000 tonnes of chemicals have been abandoned
in a burnt-out detergents and cosmetics factory. ‘Each time it rains,
residues are washed from the site across a field and then to the River
Drava,’ says Richardson. In the wreckage, Richardson found pesticides,
phosphates and 250 tonnes of sodium hydroxide. Fragments of exploded
munitions, glass and asbestos strewn throughout the factory make the task of
cleaning up more difficult.

A team from the University of Zagreb found concentrations of cadmium two
hundred times higher than background levels around a munitions dump near
Ojutin. The contamination, which exceeded 15 kilometres around the site also
includes mercury and thallium. Birds have been found with high
concentrations of heavy metals in their tissues.

Throughout Croatia, the spillage of PCBs from transformers and other
electrical equipment has caused further hazards, often in the middle of
towns.

Told to lie back and think of the environment, British taxpayers can be
forgiven for a little scepticism over the motives behind levying value added
tax on domestic fuel. But if governments are to commit themselves to
significant curbs in greenhouse gas emissions, the new tax will be a mere
taste of things to come.

The case for new and tougher energy taxes is convincingly argued by Victor
Anderson. A disciple of what he calls the ‘new economics’, a synthesis of
economics and environmentalism, Anderson supports the principle of a ‘carbon
tax’ levied on fossil fuels, aimed at cutting energy demand and promoting
renewables such as wind and solar power.

For centuries, industrial economies have used up finite environmental
resources, but unlike other resources, such as labour and capital, which
form the core of the market economy, the environment comes free of charge.
Fossil fuel prices do not reflect the billions of tonnes of carbon dioxide
pumped into the atmosphere each year.

According to new economics, the 25 per cent increase in atmospheric carbon
dioxide since the Industrial Revolution represents an unsustainable
environmental subsidy: only with a carbon tax, to set a price on pollution,
can the ecological and economic systems coexist.

On 7 June, European Community finance ministers met to discuss proposals for
just such a tax, more or less supported by all member states except Britain
(which claims that its initiative on domestic fuel will be sufficient). The
US Congress is also considering a new energy tax proposal, and Australia’s
government has expressed interest in the idea, too.

But will carbon taxes actually work? Though a keen advocate of the tax,
Anderson identifies many snags in his comprehensive analysis of the economic
and ecological issues at stake. First, there is the danger that the revenues
from a carbon tax will not be recycled into the economy, but will instead be
used to enhance government finances and pay off borrowing, as with both the
US energy tax and the British plan to tax domestic fuel.

Second, there is the impact on the poor. Richer households, which could make
the greatest energy savings, can afford to ignore increases in fuel prices;
but low-income households, which will be left worse off, are already careful
with their use of heat and light. To get round the problem, Anderson
proposes a ‘progressive’ carbon tax: the tax rate would increase depending
on the amount of fuel used.

But perhaps the greatest obstacle to the effective working of a carbon tax
is that energy use depends on more than just price. Shoppers often do not
know how much electricity an appliance uses until they get it home; and
electricity bills cannot be itemised. Similarly, landlords find it hard to
justify investment in insulation when it is their tenants who would benefit.

I suspect Anderson does not mean to pour cold water on the European
Community’s carbon tax proposal, but his book is a timely reminder that
energy taxation is no panacea against global warming. The UN’s scientific
advisory panel recommended a 60 per cent cut in global greenhouse gas
emissions, and Anderson suggests an 84 per cent cut may be Britain’s fair
share. He argues such cuts can be achieved, without wrecking the economy,
by massive investment in renewable energy and public transport, and
draconian energy efficiency and planning regulations to back up a hefty
carbon tax.

Monumental political will, of the kind normally offered only by
dictatorships, would be needed to forge a speedy curb in carbon emissions.
The government’s current policy is just to stabilise emissions at 1990
levels by 2000. But Anderson’s starry-eyed conclusion that politicians must
now appeal to a new form of nationalism, a ‘patriotism of the planet’ seems
to confirm there will not be large cuts in emissions at least for some
decades to come.

Julian Rose is a science writer.