Doug Henwood on Thu, 19 Sep 2002 23:23:51 +0200 (CEST)

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Re: <nettime> China Seizes Banned E-Waste

Soenke Zehle wrote:

>Remember the 1991 memo by Larry Summers, leaked to Greenpeace, on how the
>so-called third world is - relatively speaking - 'underpolluted', which is
>why it would make sense to spread the pain just a bit more evenly?

Actually it was worse than that. The memo, actually written by World Bank
economist Lant Pritchett, though signed by Summers, said that it made
economic sense to dump toxic waste in low-wage countries, since the "cost"
of pollution is measured by the wages lost to sickness and early death.
The lower the wage, the lower the cost! The logic is "impeccable" (which
is true enough, if you accept the crackpot logic of neoclassical

Doug Henwood
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The text of the relevant passage:

>3. "Dirty" industries. Just between you and me, shouldn't the World 
>Bank be encouraging more migration of the dirty industries to the 
>LDCs [less-developed countries]? I can think of three reasons:
>1) The measurement of the costs of health impairing pollution 
>depends on the foregone earnings from increased morbidity and 
>mortality. From this point of view a given amount of health 
>impairing pollution should be done in the country with the lowest 
>cost, which will be the country with the lowest wages. I think the 
>economic logic behind dumping a load of toxic waste in the lowest 
>wage country is impeccable and we should face up to that.
>2) The costs of pollution are likely to be non-linear as the initial 
>increments of pollution probably have very low cost. I've always 
>thought that underpopulated countries in Africa are vastly 
>under-polluted, their air quality is probably vastly inefficiently 
>low compared to Los Angeles or Mexico City. Only the lamentable 
>facts that so much pollution is generated by non-tradable industries 
>(transport, electrical generation) and that the unit transport costs 
>of solid waste are so high prevent world welfare enhancing trade in 
>air pollution and waste.
>3) The demand for a clean environment for aesthetic and health 
>reasons is likely to have very high income elasticity. The concern 
>over an agent that causes a one in a million change In the adds of 
>prostrate [sic] cancer is obviously going to be much higher in a 
>country where people survive to got prostrate cancer than in a 
>country where under 5 mortality is 200 per thousand. Also, much of 
>the concern over industrial atmospheric discharge is about 
>visibility impairing particulates. These discharges may have very 
>little direct health impact. Clearly trade in goods that embody 
>aesthetic pollution concerns could be welfare enhancing. While 
>production is mobile the consumption of pretty air is a non-tradable.
>The problem with the arguments against all of these proposals for 
>more pollution in LDCs (intrinsic rights to certain goods, moral 
>reasons, social concerns, lack of adequate markets, etc.) could be 
>turned around and used more or less effectively against every Bank 
>proposal for liberalization.

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