3.7C Economic development and environmental impact

• Inequality is decreasing because:

  • Rapid development of many LDC's through trade and specialisation
  • FDI and TNC's help kick start economies (multiplier effect)
  • reduction in trade barriers opens up EDC markets for trade
  • employment, standard of living and income have been boosted
• Inequality is decreasing slower than it could be because:

  • TNC profits are "leaked' back to AC
  • Exploitation from TNC's (labour and wages)
  • TNC's can stifle the multiplier effect by keeping wages low
• Inequality history: Sweden and China

  • Sweden's income per person has risen hugely, but it's ecological footprint has not (about 8 hectares per person in both 2012 and 1972)
  • China's ecological footprint has steadily risen (about 1 hectare in 1970 to 3 in 2012), however it is still more than half less than Sweden's.
  • Since 2001, rising Chinese incomes correlate with very large increases in ecological footprint ($3,180 PPP in 2001, and $15,500 in 2016). Likewise, Sweden's PPP has risen from $29,710 in 2001 to $50,000 without very little change in ecological footprint.