This article is about the carbon emissions that many of us don’t know about, or perhaps choose to ignore. It is about the carbon emissions that are only indirectly related to what we do, but are most certainly caused by what we do. It is also about the way we behave, and how that can have a huge impact on those hidden carbon emissions.
Now we are becoming more aware of the direct impact of our actions upon the natural environment we need to take a more holistic view of how humans interact with each other - as individuals, communities and nations - and how these divisions interact with their own local and regional environments. The complex web that is drawn out may be too much to take in at once; you only have to look at the way the oceans and the atmosphere move energy around the world at a dizzying array of different speeds to appreciate this. The temptation is to look at only our most basic impacts – the pollution from our exhaust pipes and the natural gas or oil we burn in our homes, for instance – losing sight of the more complex effects of our activity. But each of us has an impact on the furthest reaches of the planet. We are all responsible for the state of the global environment.
Whilst writing an article called “The Problem With…Christmas”, the question kept coming to me : “why is it that the huge quantities of goods being manufactured and then transported around the world is not one of the hot topics of the age?” The more I think about this question, the clearer it becomes that there are two reasons. First, that the share prices of the largest companies in the world – who effectively run the global economy – are dependent on producing goods as cheaply as possible; and second, that most people don’t really know, or care, how much damage is caused by their buying habits. But don’t take my word for that second point, look at some figures for the UK; a country with a burgeoning “ethical consumer” market.
A recent article in the Economist, covering the UK’s Marks and Spencer’s “conversion” to ethical buying, referred to two survey results; one that showed a willingness amongst British shoppers to pay more for ethically produced goods, and another that showed a third of Britons buying Fair Trade – certifiably ethical – foods. However, and here’s the catch, according to the research only 27% of consumers were actually prepared to pay more for ethically produced clothing. Even more telling, according to the Fair Trade Foundation, sales of the mentioned Fair Trade goods was worth £195m in 2005, compared to an annual total for all food sales (let’s be really generous and exclude coffee and tea) of about £80,000million. Fair trade accounts for a paltry 0.2% of UK sales. Consumers are clearly not rushing out to save the world.
Ethical Dilemma
But even if consumers were willing to take action on ethical and environmental issues, what chance do they have? The aforementioned Marks and Spencer were the premium clothing retailer in the UK throughout the 1970s and 1980s, and part of the attraction was the St Michael brand, trumping all others with its proud “Made In Britain” boast. Due to the collapse of the British textile industry, caused largely by retailers’ drive for cheap clothes at a profit the proportion of M&S clothes manufactured in the UK fell from 80% (1991) to just 7% (1994) in the space of 3 years. M&S customers had little option but to buy clothes manufactured outside the UK : no other major retailer had hung on to their UK suppliers for so long.
This pattern has been repeated throughout the western market economies, and in virtually all sectors of the retail trade. One widely-quoted report is from a PBS Frontline interview with Gary Gereffi who said that in the mid-1980s Walmart in the USA imported only 6% of its goods, but by 2004 60% of its goods were imported, the majority of them from China. Considering that the USA has a long history of strong trade protectionism (tariffs and the like), this figure is astounding. Gereffi goes on to say “But Wal-Mart also sources indirectly from China, because many of the brands that are sold in Wal-Mart, like Hasbro and Mattel and [others in] the toy business, those companies also have China factories. So in a sense, Wal-Mart's share of Chinese goods is multiplied”. Remember that word “indirectly” in my opening paragraph?
It is not always the case that goods not made locally to the consumer are ethically poorer than those made locally – consider, for example, a Burmese consumer buying a German-made washing machine. In addition, there are a growing number of companies who are very careful about their standards of production, wherever in the world their products are made. But there is more to consumer ethics than just the human cost of production. As you will see, the manufacture of goods varies massively in its impact on the natural environment, as does the subsequent transportation of those goods.
We must also bear in mind that 67% of global exports, and 70% of global imports are carried out by OECD countries, so it is these countries that have the greatest potential to damage and also protect the natural environment through their production and consumption of goods. The OECD, consisting of 30 countries, including the USA, Japan, Germany and Canada, only contains 18% of the world’s population. These highly skewed figures sit uncomfortably in a global trade market that doubled in the 10 years between 1995 and 2005.
A Tale Of Two Countries
I am going to concentrate on two countries – China and the USA – because together they show a number of trends being repeated between other key partners throughout the world, and whose trading relationship is the subject of much heated debate in both countries.
According to figures from the World Trade Organisation, the trade relationship between China and the USA looks like this:
· In 2005 the USA exported $904bn worth of goods (manufactured items, raw materials and agricultural produce), and imported $1732bn worth; a net deficit of over $800bn. This accounted for 26% of world trade.
· In the same year, China exported $762bn worth of goods, and imported $660bn worth; a net surplus of around $100bn. This accounted for 14% of world trade.
· The USA exported nearly $42bn worth of goods to China in 2005, an increase of the equivalent of $23bn since 2000.
· The USA imported $260bn worth of goods from China in 2005, an increase of the equivalent of $111bn since 2000.
What is immediately clear is that China has a far healthier balance of payments in terms of manufactured goods than the USA, and for every $1 worth of goods that the USA exports to China, it imports $4.8 worth.
Now, of course, the USA has its own automobile, electrical goods and clothing industries, as well as large mining and farming sectors, and according to the US Census Bureau, in 2005 the total manufactured product in the USA was worth $4,700bn. However, out of the $260bn worth of goods imported from China in 2005, $250bn was in manufactured goods, and this has grown by 10% in the last 5 years. Look 10 years into the future, and you can see that China, and other distant developing nations, will become very significant indeed.
But why does this matter?
It matters because a television or a car produced in the USA, to be used in the USA, does not have the same carbon footprint as a television or car produced in China that is to be exported for use in the United States.
The Export Of Responsibility
Between 1990 and 2003, the total carbon emissions from fossil fuels in China increased by 73%, to 1.1 billion tonnes, or 15% of the world total. Extend this trend to 2006 and, based on a global growth of 18% in the same period, China now accounts for over 17% of the world’s fossil fuel emissions. In fact the figure may be even higher as China has expanded it’s use of coal exponentially in the last 3 years. China produces its electricity in a far dirtier way than most high industrialised countries. According to the World Coal Institute, 80% of China’s electricity is generated using coal, compared to less than 50% in the USA. In addition China’s coal fired power stations are around 17% less efficient than those in more mature economies.
It is not easy to work out how much extra carbon is produced by the USA importing goods from China, but we can make a fair estimate:
· China’s electricity production comes from 80% coal and about 20% hydro power. Allowing for the 17% efficiency loss in coal generation mentioned above this gives (based on BP’s figures) a carbon output of 240g carbon per kWh of electricity.
· The USA generates its electricity from 50% coal and 19% natural gas, with all other fuels being virtually carbon free. This gives a carbon output of 155g carbon per kWh of electricity.
· The earlier WTO sources give a net figure of the USA importing $220bn worth of manufactured goods from China in 2005. This is equivalent to nearly 5% of the entire USA manufacturing output.
· According to the IPCC the manufacturing sector is responsible for a third of all electricity consumption in the USA. This means that of the 4,055 billion kWh consumed in 2005, the equivalent of 22.3 billion kWh USA electricity was consumed in China.
Because of the inefficiencies of Chinese electricity production, this means that just by importing $220bn worth of manufactured goods from China, the USA produced an extra 1.9 million tonnes of carbon from electricity generation. Equivalent to the total annual emissions of 352,000 average Americans.
We must add to this the fact that (based on figures from this article) every tonne of goods transported by ship from China (Hong Kong) to the USA (Los Angeles) generates 190kg carbon equivalent in emissions. The UNCTAD report for 2004 states that 25% of Chinese exports by ship went to the USA in that year. With a total container cargo of 18.6 million tonnes in 2005, the amount of carbon produced just by transporting USA imports from China was about 886 thousand tonnes; equivalent to the emissions of 164,000 average Americans.
This is just the tip of a very large iceberg. Trade between the USA and China accounts for a mere 3% of global trade. What about the huge volume of exports to the USA from Mexico, which generates the majority of its electricity from coal and the far dirtier fuel oil? The even larger volumes of exports from China to Europe? The huge potential exports to OECD countries from India, which are growing by 20% every year?
Throughout the world, companies in every highly industrialised nation are moving their manufacturing output to cheaper, less efficient, and more distant countries.
Global trade is growing – according to the WTO – by 5% per year, and there is no sign of this slowing down. All the time we consume more, and ignore the impact of our consumption – the dirty factories, the rising carbon levels, the tide of consumer goods moving around the planet. Because we are exporting the responsibility of our emissions to other places they become invisible to the consumer, yet remain deadly to the Earth.
Whilst writing an article called “The Problem With…Christmas”, the question kept coming to me : “why is it that the huge quantities of goods being manufactured and then transported around the world is not one of the hot topics of the age?” The more I think about this question, the clearer it becomes that there are two reasons. First, that the share prices of the largest companies in the world – who effectively run the global economy – are dependent on producing goods as cheaply as possible; and second, that most people don’t really know, or care, how much damage is caused by their buying habits. But don’t take my word for that second point, look at some figures for the UK; a country with a burgeoning “ethical consumer” market.
A recent article in the Economist, covering the UK’s Marks and Spencer’s “conversion” to ethical buying, referred to two survey results; one that showed a willingness amongst British shoppers to pay more for ethically produced goods, and another that showed a third of Britons buying Fair Trade – certifiably ethical – foods. However, and here’s the catch, according to the research only 27% of consumers were actually prepared to pay more for ethically produced clothing. Even more telling, according to the Fair Trade Foundation, sales of the mentioned Fair Trade goods was worth £195m in 2005, compared to an annual total for all food sales (let’s be really generous and exclude coffee and tea) of about £80,000million. Fair trade accounts for a paltry 0.2% of UK sales. Consumers are clearly not rushing out to save the world.
Ethical Dilemma
But even if consumers were willing to take action on ethical and environmental issues, what chance do they have? The aforementioned Marks and Spencer were the premium clothing retailer in the UK throughout the 1970s and 1980s, and part of the attraction was the St Michael brand, trumping all others with its proud “Made In Britain” boast. Due to the collapse of the British textile industry, caused largely by retailers’ drive for cheap clothes at a profit the proportion of M&S clothes manufactured in the UK fell from 80% (1991) to just 7% (1994) in the space of 3 years. M&S customers had little option but to buy clothes manufactured outside the UK : no other major retailer had hung on to their UK suppliers for so long.
This pattern has been repeated throughout the western market economies, and in virtually all sectors of the retail trade. One widely-quoted report is from a PBS Frontline interview with Gary Gereffi who said that in the mid-1980s Walmart in the USA imported only 6% of its goods, but by 2004 60% of its goods were imported, the majority of them from China. Considering that the USA has a long history of strong trade protectionism (tariffs and the like), this figure is astounding. Gereffi goes on to say “But Wal-Mart also sources indirectly from China, because many of the brands that are sold in Wal-Mart, like Hasbro and Mattel and [others in] the toy business, those companies also have China factories. So in a sense, Wal-Mart's share of Chinese goods is multiplied”. Remember that word “indirectly” in my opening paragraph?
It is not always the case that goods not made locally to the consumer are ethically poorer than those made locally – consider, for example, a Burmese consumer buying a German-made washing machine. In addition, there are a growing number of companies who are very careful about their standards of production, wherever in the world their products are made. But there is more to consumer ethics than just the human cost of production. As you will see, the manufacture of goods varies massively in its impact on the natural environment, as does the subsequent transportation of those goods.
We must also bear in mind that 67% of global exports, and 70% of global imports are carried out by OECD countries, so it is these countries that have the greatest potential to damage and also protect the natural environment through their production and consumption of goods. The OECD, consisting of 30 countries, including the USA, Japan, Germany and Canada, only contains 18% of the world’s population. These highly skewed figures sit uncomfortably in a global trade market that doubled in the 10 years between 1995 and 2005.
A Tale Of Two Countries
I am going to concentrate on two countries – China and the USA – because together they show a number of trends being repeated between other key partners throughout the world, and whose trading relationship is the subject of much heated debate in both countries.
According to figures from the World Trade Organisation, the trade relationship between China and the USA looks like this:
· In 2005 the USA exported $904bn worth of goods (manufactured items, raw materials and agricultural produce), and imported $1732bn worth; a net deficit of over $800bn. This accounted for 26% of world trade.
· In the same year, China exported $762bn worth of goods, and imported $660bn worth; a net surplus of around $100bn. This accounted for 14% of world trade.
· The USA exported nearly $42bn worth of goods to China in 2005, an increase of the equivalent of $23bn since 2000.
· The USA imported $260bn worth of goods from China in 2005, an increase of the equivalent of $111bn since 2000.
What is immediately clear is that China has a far healthier balance of payments in terms of manufactured goods than the USA, and for every $1 worth of goods that the USA exports to China, it imports $4.8 worth.
Now, of course, the USA has its own automobile, electrical goods and clothing industries, as well as large mining and farming sectors, and according to the US Census Bureau, in 2005 the total manufactured product in the USA was worth $4,700bn. However, out of the $260bn worth of goods imported from China in 2005, $250bn was in manufactured goods, and this has grown by 10% in the last 5 years. Look 10 years into the future, and you can see that China, and other distant developing nations, will become very significant indeed.
But why does this matter?
It matters because a television or a car produced in the USA, to be used in the USA, does not have the same carbon footprint as a television or car produced in China that is to be exported for use in the United States.
The Export Of Responsibility
Between 1990 and 2003, the total carbon emissions from fossil fuels in China increased by 73%, to 1.1 billion tonnes, or 15% of the world total. Extend this trend to 2006 and, based on a global growth of 18% in the same period, China now accounts for over 17% of the world’s fossil fuel emissions. In fact the figure may be even higher as China has expanded it’s use of coal exponentially in the last 3 years. China produces its electricity in a far dirtier way than most high industrialised countries. According to the World Coal Institute, 80% of China’s electricity is generated using coal, compared to less than 50% in the USA. In addition China’s coal fired power stations are around 17% less efficient than those in more mature economies.
It is not easy to work out how much extra carbon is produced by the USA importing goods from China, but we can make a fair estimate:
· China’s electricity production comes from 80% coal and about 20% hydro power. Allowing for the 17% efficiency loss in coal generation mentioned above this gives (based on BP’s figures) a carbon output of 240g carbon per kWh of electricity.
· The USA generates its electricity from 50% coal and 19% natural gas, with all other fuels being virtually carbon free. This gives a carbon output of 155g carbon per kWh of electricity.
· The earlier WTO sources give a net figure of the USA importing $220bn worth of manufactured goods from China in 2005. This is equivalent to nearly 5% of the entire USA manufacturing output.
· According to the IPCC the manufacturing sector is responsible for a third of all electricity consumption in the USA. This means that of the 4,055 billion kWh consumed in 2005, the equivalent of 22.3 billion kWh USA electricity was consumed in China.
Because of the inefficiencies of Chinese electricity production, this means that just by importing $220bn worth of manufactured goods from China, the USA produced an extra 1.9 million tonnes of carbon from electricity generation. Equivalent to the total annual emissions of 352,000 average Americans.
We must add to this the fact that (based on figures from this article) every tonne of goods transported by ship from China (Hong Kong) to the USA (Los Angeles) generates 190kg carbon equivalent in emissions. The UNCTAD report for 2004 states that 25% of Chinese exports by ship went to the USA in that year. With a total container cargo of 18.6 million tonnes in 2005, the amount of carbon produced just by transporting USA imports from China was about 886 thousand tonnes; equivalent to the emissions of 164,000 average Americans.
This is just the tip of a very large iceberg. Trade between the USA and China accounts for a mere 3% of global trade. What about the huge volume of exports to the USA from Mexico, which generates the majority of its electricity from coal and the far dirtier fuel oil? The even larger volumes of exports from China to Europe? The huge potential exports to OECD countries from India, which are growing by 20% every year?
Throughout the world, companies in every highly industrialised nation are moving their manufacturing output to cheaper, less efficient, and more distant countries.
Global trade is growing – according to the WTO – by 5% per year, and there is no sign of this slowing down. All the time we consume more, and ignore the impact of our consumption – the dirty factories, the rising carbon levels, the tide of consumer goods moving around the planet. Because we are exporting the responsibility of our emissions to other places they become invisible to the consumer, yet remain deadly to the Earth.
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