Some analysts are concerned that the environmental cost of globalization is extremely high. It is believed that the global corporations depend upon never-ending resource supplies, ever-expanding markets and constant supplies of cheap labor. Critics say these goals have been given priority over preservation of nature and public health. The world, they say, is on the brink of an environmental collapse and the current levels of global production are unsustainable. Another pertinent issue is that many advanced nations are able to circumvent environment laws in their countries by setting up production facilities in countries that do not have stringent environmental rules. This phenomenon has been termed as a “race to the bottom” in environmental standards as countries fight to attract more foreign capital and keep domestic investment at home.
As described earlier, provisions in certain investment agreements such as NAFTA’s Chapter 11 that deal with expropriation or “regulatory takings” are also of great concern to environmentalists, because they can threaten environmental regulations.