Foreign Investment, Globalization, and Environment
Author(s)
Esty, Daniel C.; Gentry, Bradford S.
Abstract
Hundreds of billions of dollars of private capital annually flow from North to South in the form of foreign direct investment (FDI), portfolio equity investment, and debt finance. How this capital is spent will have a much more profound effect on the quality of the global environment than the few billion dollars of official assistance devoted to environmental investments each year. This chapter argues that a variety of factors that influence how private capital flows to developing countries also affect the environment. In particular, it reviews the incentives and conditions that determine who get private capital funds and outlines ways environmental goals could be better integrated into foreign investment processes.
