Question

Is there one optimal environmental standard for the entire world? If not, how might using trade barriers to enforce country-specific environment standards reduce overall wellbeing?

Answer 1

There is no one environmental standard for the entire world, as each country has its own environmental regulations and laws that make the people, firms and industry to obey the environmental guidelines and become compliant to the environmental standards.  It happens, because each country has its own, geo-political scenario, need of development and state of the economy along with the status of the environment in that country. It makes the government to come up with their  own set of rules, governing in that country. Though, there are some international conventions and voluntary acceptance of implementing the practices that will work to save the world as well.

Trade barriers can be applied to enforce country specific environmental standards and it will be applied to the foreign players as well as domestic players. Here, domestic players are already complying with the standards and putting up a price for their goods and services for maintaining clean and green technology. When a foreign players come in, then they will either make the price at the level of domestic price, or they will reduce the price. It will make consumers to be better off and force the domestic players to offer competitive price as well as to remain relevant in the market.  Hence, it increases the well being of the consumers as they get more environmentally friendly market. Though, it will make domestic players to be competitive and not lose the market share to the foreign players, entered in the country.