More Than 25% Of CO2 Emissions Come From Buying Cheap Foreign Goods

Ethonomic Indicator of the Day: 26% — the amount of global CO2 emissions that come from the production of traded goods and services.

A quick look around your home or office should yield the obvious conclusion that we rely heavily on international trade for many of the nice things we like to do, eat, and play with. But a global economy comes with a heavy greenhouse gas cost. In fact, 26% of all carbon emissions come from the production of traded goods and services. So while clothes from China may be cheap to produce, buying them and having them shipped to you comes with a future cost that many of us would like to ignore.

The report, published in the Proceedings of the National Academy of Sciences, breaks down the problem:

Our results show that the global emissions associated with consumption in many developed countries have increased with a large share of the emissions originating in developing countries. This finding may benefit economic growth in developing countries, but the increased emissions could also make future mitigation more costly in the developing countries. In addition, we find that the emission transfers via international trade often exceed the emission reductions in the developed countries.

The more developed countries rely on developing countries like China to produce cheap goods, the more China and its ilk have to deal with increased emissions—though they also get a big dose of economic development. Meanwhile, the developing countries can pretend that they have lowered their emissions, when in reality they have just transferred them to trade partners. Everyone wins, before everyone loses. This kind of thing makes it easier for developed countries to meet emissions targets without making significant changes. Because its easier to ignore a problem when it's in somebody else's backyard, right? No matter how much we reduce our carbon emissions (and we have, pat on the back), those gains are just being eaten up by the developing world:

Emissions from international trade certainly need to be more closely monitored, but this study indicates that localized economies should be considered more seriously. It's impossible (and unwise) to completely break down the global supply chain, but relying more on locally-produced goods at least makes it easier to track emissions. And that's the first step towards change. In this case, that means a switch from blaming emissions on China to acknowledging that a lot of the country's manufacturing is geared towards us—and then working to curb emissions at the source.

[Photo Credit: Ian Koh]

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1 Comments

  • Lance Sy

    "Emissions from international trade certainly need to be more closely monitored, but this study indicates that localized economies should be considered more seriously. It's impossible (and unwise) to completely break down the global supply chain, but relying more on locally-produced goods at least makes it easier to track emissions. And that's the first step towards change. In this case, that means a switch from blaming emissions on China to acknowledging that a lot of the country's manufacturing is geared towards us--and then working to curb emissions at the source."

    Or, as the basic economics of externalities would suggest, impose a ("carbon") tax to internalize those "future cost(s) that many of us would like to ignore." That way, with all relevant costs factored in, consumers can weigh for themselves whether these "localized economies" really make the most sense, and producers - both local and global - responding to the market will de-carbonize their production processes accordingly.