of the governments of such countries is that environmental protection is a luxury: as soon as their people have

enough to eat, decent healthcare, and longer life expectancies, then they will spend more money on items such

as sewage treatment plants, scrubbers to reduce air pollution from factory smokestacks, and national parks to

protect wildlife.

This gap in environmental standards between high-income and low-income countries raises two worrisome

possibilities in a world of increasing global trade: the “race to the bottom” scenario and the question of how

quickly environmental standards will improve in low-income countries.

The Race to the Bottom Scenario

The race to the bottom scenario of global environmental degradation runs like this. Profit-seeking

multinational companies shift their production from countries with strong environmental standards to

countries with weak standards, thus reducing their costs and increasing their profits. Faced with such
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