Tuesday, August 5, 2008

Should we celebrate reduced global trade?

In a recent article, the New York Times discusses the impact of high oil prices on global trade. As one might expect, increasing the cost of shipping products will make foreign goods relatively more expensive, increasing the competitiveness of local alternatives. This could be good news for Mexican producers, who are closer to the US market, and bad news for their Chinese counterparts across the Pacific. Similarly, China will likely shift from Brazilian steel to steel from Australia.

Sounds simple enough. But some critics of globalization see this as an opportunity to reverse the process of global economic integration and move back towards a local economic model. Naomi Klein, author of the Shock Doctrine, clearly summarizes this perspective:
“If we think about the Wal-Mart model, it is incredibly fuel-intensive at every stage, and at every one of those stages we are now seeing an inflation of the costs for boats, trucks, cars. That is necessarily leading to a rethinking of this emissions-intensive model, whether the increased interest in growing foods locally, producing locally or shopping locally, and I think that’s great.”
Further, the article notes that some environmental and globalization-critical blogs have started the "globalization death watch".

Is this a time for environmentalists to be celebrating? When it comes to food exports, the answer may be no. While the "locavore" movement has gained popularity in recent years, surprising research from the Civil and Environmental Engineering School at Carnegie Mellon suggests that "food miles" are actually a very small part of carbon emissions associated with food production and distribution. Specifically, the researchers concluded:
We find that although food is transported long distances in general (1640 km delivery and 6760 km life-cycle supply chain on average) the GHG emissions associated with food are dominated by the production phase, contributing 83% of the average U.S. household’s 8.1 t CO2e/yr footprint for food consumption. Transportation as a whole represents only 11% of life-cycle GHG emissions, and final delivery from producer to retail contributes only 4%. Different food groups exhibit a large range in GHG-intensity; on average, red meat is around 150% more GHG-intensive than chicken or fish. Thus, we suggest that dietary shift can be a more effective means of lowering an average household’s food-related climate footprint than “buying local.” Shifting less than one day per week’s worth of calories from red meat and dairy products to chicken, fish, eggs, or a vegetable-based diet achieves more GHG reduction than buying all locally sourced food.
There are two reasons for this. First, we typically forget about the carbon emissions from the production of food, which can be substantial. Locally-grown, organic beef, for example, is vastly more environmentally damaging than chicken or pork grown half-way around the world. Further, we tend to forget that some areas are better suited for growing certain produce (a comparative advantage, if you will) than others. Research has found that it is less carbon intensive for British consumers to get their tomatoes from sunny Spain than from greenhouses (which consume significant amounts of electricity, etc) in their own towns.

The second reason is that there are significant economies of scale in global transportation, which cut down on the per-unit food emissions. Consider the example of farmers' markets. Local farmers each load up their pickup trucks with the food they, themselves, grew and drive them to the market. While the total emissions produced by each farmer is very small, the per-unit emissions may be quite high. Conversely, large tanker ships produce large total emissions, but very small per-unit emissions, since they carry so much in one trip.

The locavore movement, or localization more generally, advocates for more self-sufficient communities, which can produce all that they need individually. Strangely, people tend to think of this as a new concept. But humans have been locavores for 99% of our history, though not by choice. Integration occurred when technology allowed for it, and people came to appreciate the efficiency from comparative advantage and economies of scale.

Of course, globalization and trade are not going to unravel simply because fuel prices have increased. And we certainly should not diminish the environmental impact of our industrial (and post-industrial) society. But we should also let our environmental policies be driven by clear science rather than ideology.

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