The challenge of sustainable development together with free trade

Alf Hornborg, Professor of Human Ecology at Sweden’s Lund University discusses a modern dilemma in an article on The Conversation website: free trade promoted by most economists and politicians continues to drive a substantial part of the greenhouse gas emissions that they want to reduce, and yet the sustainable technologies they propose to cut emissions are in themselves dependent on economic growth, international trade, and the use of more and more natural resources.

 

Why you can’t have free trade and save the planet

When Donald Trump recently announced tariffs on steel and aluminium imports he was condemned by proponents of free trade across the world. His critics said the US president had not understood how protectionist policies would spell disaster for the world economy. Fair enough. But this is the same Trump whose decision to withdraw from the Paris climate agreement also met with massive disapproval.

Trump is simultaneously chided for refusing to cut emissions, and for promoting a trade policy that reduces the causes of such emissions. Both sets of critics may be right on their own terms, but the contradiction between the two reproaches exposes big problems in the mainstream modern worldview. Is it really reasonable to advocate for both more trade and greater concern for the environment?

For centuries world trade has increased not only environmental degradation, but also global inequality. The expanding ecological footprints of affluent people are unjust as well as unsustainable. The concepts developed in wealthier nations to celebrate “growth” and “progress” obscure the net transfers of labour time and natural resources between richer and poorer parts of the world.

For instance, the household of an average American couple with one child has the equivalent of an invisible servant working full time for it outside the nation’s borders, while the average Japanese household with one child uses three hectares of land overseas. Yet such material asymmetry appears to be a side issue for mainstream economists, who continue to assert the overall benefits of free trade.

This same ignorance is particularly apparent in the fight against climate change. Most environmentalists and researchers put their faith in new technologies for harnessing the sun and wind, and hope that politicians can be persuaded to act. But solar panels and wind farms are not merely products of human ingenuity that have been revealed to us by nature. Nor are they magical keys to limitless energy.

Renewable energy technologies emerged in this specific human society – inequality, globalisation and all – and their very feasibility is dependent on world market prices. Like other modern technologies they depend on high domestic purchasing power combined with cheap Asian labour, Brazilian land, or Congolese cobalt.

Almost 50 years ago the ecological economist Nicholas Georgescu-Roegen warned that the notion that solar power could replace fossil energy was an illusion, because it would require such enormous volumes of materials to harness the requisite amounts of diffuse sunlight to satisfy a modern high-tech society. Some of these materials are rare and expensive and degrade the environment. Moreover, the United Nations Environmental Programme recently warned that the world is heading for ecological disaster unless we use less resources per dollar of economic growth.

The Czech-Canadian energy researcher Vaclav Smil has found that switching to renewable energy would use up vast amounts of land, reversing the land-saving benefits of the Industrial Revolution. Meanwhile the money to invest in solar is still ultimately generated from cheap labour and cheap land. The fact that solar panels have recently become less expensive is partly because they are increasingly being manufactured by low-wage labour in Asia.

When viewed this way it is perhaps no wonder that renewable energy has not even begun to replace fossil energy, and has only been added to the still-increasing use of oil, coal and gas. Solar power still only accounts for about 1% of global energy use. It has hardly made a dent on the global use of energy for electricity, industry, or transports. And this cannot be blamed on the oil lobby, as is illustrated by the case of Cuba. Nearly all of the island’s electricity still derives from fossil fuels. There is obviously something problematic about shifting to solar power that goes beyond corporate obstruction. To explain it in terms of a lack of capital or in terms of the vast land requirements are two sides of the same coin.

So here is the impasse of modern civilization: the free trade promoted by most economists and politicians continues to drive a substantial part of the greenhouse gas emissions that they want to reduce, and yet the sustainable technologies they propose to cut emissions are in themselves dependent on economic growth, international trade, and the use of more and more natural resources.

So how to break this impasse? Economists could start by recognising that the economy is not insulated from nature, just as engineering is not insulated from world society. Global challenges of sustainability, justice and resilience all demand much more integrated thinking.

This will involve confronting conventional ideologies of technological progress and free trade. Rather than nervously safeguarding world trade with its escalating greenhouse gas emissions, we have every reason to reconsider what might be perceived as true human progress and quality of life. Instead of economic policies maximising economic growth and resource use, humankind needs to develop an economy that is aligned with the constraints of our fragile biosphere – and a science of engineering that takes account of global inequalities.

 

2 thoughts on “The challenge of sustainable development together with free trade

  1. I agree with many of your points, especially the need for more integrated (‘systems’) thinking. Also, we should more closely look at the links between trade and sustainable development. In terms of the economic dimension of SD, trade has done pretty well in diminishing (extreme) poverty. In fact, in terms of extreme poverty and many other socio-economic indicators, humanity is doing better than ever before: https://ourworldindata.org/a-history-of-global-living-conditions-in-5-charts. However, this has come at the cost of environmental degradation. In general, the impact of trade is measured in terms of 4 effects: direct (e.g. emissions from ships and aircraft that transport goods), technique (e.g. trade in environmental technologies), scale (trade leads to economic growth and this is an effect that you mostly focus on), composition (e.g. China switched to solar panel production because it saw export potential and at same time its coal sector has contracted). Please also note that Georgescu-Roegen wrote that solar power is insufficient 50 years ago. Last year the price of high-efficiency panels dropped by 37% and is set to drop much further. There are numerous recent studies out that conclude that solar can meet global energy demand. Then you describe net imports of resources to developed countries. This is indeed a sensitive matter but also here it is important to look more in detail at where those resources came from. If there is, for example, a shortage of labor in Japan due to aging and surplus of labor in a developing country, why should the people their remain jobless if their supply of labor could meet Japanese demand? that would be a win-win. Similar for countries that have a surplus of land or surplus of water (e.g. Russia). Or if Russia could export more wood to China then there they could build more wooden houses which are more sustainable than concrete buildings. Where it becomes a problem is when a country that lacks a resource starts to export that resource (FOR example the US importing water from water constrained regions in Mexico to water golf courses). So after all, it is important to look in more detail at where trade can contribute to sustainable development and where not, and not to blame trade for all the wrongs in the world. That would be throwing out the baby with the bathwater (then we should also abandon all healthcare because it leads to terrible pollution through pharmaceuticals etc). A true systems view would look both at the science and real impacts of trade (including in specific instances) and couple that with effective policies (science-policy interface) so that sustainability improves in practice. Also, see my new book https://www.springer.com/us/book/9789811304743

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.