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Is economic globalisation bad for the environment?

It’s complex. Economic globalisation may offer some environmental benefits, for example, transnational corporations (TNCs) are more likely to use cleaner fuel and power options than local companies. Globalisation also means greater awareness of pressing environmental issues while entities such as the World Trade Organisation (WTO), alongside regional trade agreements (RTAs), promote environmentally sustainable practices.

On the other hand, global supply chains mean that goods travel further afield, which results in more emissions than if goods stayed local. In addition, the race to the bottom hypothesis suggests that economic gains come at a heavy environmental cost as open economies may disregard environmental standards in the pursuit of profits. Meanwhile, increased global demand for certain products can cause supply issues, which leads to environmental consequences. The depletion of vast areas of forest in Mexico to meet the demand for avocados is one example of this.

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