Pollution Havens and the Transfer of Environmental Risk

The pollution haven debate fractures along three fault lines: scope, methodology, and values. The scope of the pollution havens question must go beyond the original definition (intentional use of lax environmental regulations to attract foreign investment) to include a broader assessment of the transfer of environmental risk. Whether attributed to governmental policy or to the behavior of firms, or both, environmental risk can be transferred as hazardous products, processes, wastes, or displaced resource extraction. Researchers mistrust each other's methodologies, especially as the conventional economic analyses consider value discussions about global environmental justice issues outside their jurisdiction. This author questions whether the transfer of environmental risk is the result of sovereign risk assessment, consciously exchanging cost for adequate compensation; or alternatively, an unethical export of environmental hazard to vulnerable societies. Copyright (c) 2002 Massachusetts Institute of Technology.