Trade vs. Green?

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Suppose you are an environmentally conscious consumer living in, say, Scotland. You walk into the supermarket and feel like buying, say, strawberries. You are offered a choice between strawberries that are locally grown and strawberries imported from Spain. Everything else being equal, which one would you go for?

Most “conscious consumers” would arguably go for the local type, thinking that it would be better for the environment. They might consider that 90% (by volume, 60% by value) of world trade is transported by sea and much of the remainder is transported by aviation (ICTSD Policy Brief). Fuels used up in these sectors account for 3.3% of the world’s greenhouse gas emissions, which is quite substantial. But if you had indeed picked the local type in this particular example, you would have actually hurt the environment!  A lifecycle analysis of both products showed that the embodied carbon was 850g CO2e for the Scottish berries and 600g CO2e for the Spanish:

Analysis showed that emission sources within the lifecycle of the two strawberry varieties varied significantly. In the case of the Scottish strawberries, the majority of emissions were associated with cultivation (64%), due to the use of peat as a growth media and its high embodied carbon. In the case of the Spanish strawberries, the most significant emission source was transport (37%), followed closely by cultivation (31%). (The co-operative Sustainability Report 2007/2008)

In other words, cultivation in Spain is more efficient and offsets the associated costs of transport, in terms of CO2 emissions.

This little example hopefully illustrates the need for a more nuanced analysis of the interplay between trade and the environment. But the issue is even more complex, if you look at it from a development perspective.

Exports have been a defining element of the rapid transition of the four Asian tigers (Hong Kong, Singapore, South Korea and Taiwan) into high-income countries and are largely viewed as an important instrument to foster growth and ultimately development. Given the scarce involvement of many developing countries in international trade, creating an adequate policy framework to allow developing countries greater access to foreign markets has been a major theme throughout the last decades. Now, as “organic foods,” “sustainable production processes” and the “greening of industry” become the buzzwords of the move towards a “Green Economy,” one might ask the question what’s in it for developing countries? Many developing countries are already grappling with inefficient and/or backward production and are having a hard time being integrated into securing a decent share in global value chains. So what will they sell, once embodied carbon is priced into products, or countries adopt more stringent standards for imports, effectively prohibiting less-green (read “less-efficient”) countries’ access to one’s domestic markets?

In fact, the lack of greater commitments to green the world economy in the run-up to Rio+20 can be attributed in large part to the inability of developed and developing economies to find a compromise on a framework that would promote less carbon emissions, while encouraging a greater inclusion of developing countries in the world economy. Developing countries fear that their western counterparts could implement import regulation that would allow them to shield their domestic industries from foreign competition, under the disguise of environmental regulation that developing countries simply cannot meet. As this sort of “green protectionism” is a major concern for policymakers here at Rio+20, it is not surprising that a substantial number of side events take up the issue in a more informal setting, fostering dialogue between academics, business, civil society and policy makers to form the basis for successful and knowledge-based negotiations. Spearheaded by Geneva-based organizations such as the World Trade Organization (WTO), the International Center for Trade and Sustainable Development (ICTSD), the International Trade Centre (ITC), the trade branches of the International Institute for Sustainable Development (IISD) and the United Nations Environment Programme (UNEP), these events are an excellent opportunity to get more background on the current issues at stake, and to join the debate. Stay tuned with Student Reporter and find out more about what strawberries, international trade, green growth and development have in common.

6 thoughts on “Trade vs. Green?

  1. A good analysis of the problem of “local vs. trade”. Now let’s hear some of the solutions proposed :). Are there any creative (& crazy) ideas discussed in Rio or elsewhere?

  2. Hey Martin,

    Thanks for your comment, the blog post you point at is interesting. However, what they write is not novel; economic theory has long established the (purely) economic gains from trade. What I was trying to stress in my example above is that it can even make ecological sense to favor trade over local production. I think this is a crucial point as the most important argument for consumption of local products has recently been an environmental one. It strikes me for example every time I hesitate to buy Quoellfrisch beer in Switzerland, why I need to encourage the cultivation of barley in this county, that is most likely at a comparative disadvantage in the cultivation of such crops. Therefore, I like such examples with conrete studies behind that try to as accurately as possible assess the carbon footprint behind products, taking into account the whole lifecycle and not only transport. Unfortunately, I haven’t come across a study yet that even incorporates the opportunity costs of inefficient production of certain crops/products. For example, vineyards in Geneva and Zurich take up hell lot of space, while housing prices are skyrocketing. This does not make sense to me.

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