Ecological Unequal Exchange
Disjunctive ecological exchange; Non-equivalent ecological exchange; Ecologically unsustainable exchange; Physical trade balance; Net export of ecological footprint; Net transfer of “negative entropy”; Embodied emissions in trade
[E]cologically unequal exchange refers to the environmentally damaging withdrawal of energy and other natural resource assets from and the externalization of environmentally damaging production and disposal activities within less-developed/less-powerful countries. It constitutes the obtainment of natural capital … and the usurpation of sink-capacity (waste assimilation properties of ecological systems in a manner enlarging the domestic carrying capacity of more-powerful/more-developed countries). It is therefore focused upon the manner and degree to which less-developed/less-powerful countries tend to fulfil (not this empty space!)
a role in the global system as a tap for the raw materials and sink for the waste products of industrialized (and post-industrial) countries, thereby underwriting the disproportionate production-consumption-accumulation processes of more-developed/more-powerful countries. (Jorgenson 2016a, 335–336)
Disjunctive ecological exchange
Nonequivalent ecological exchange
Ecologically unsustainable exchange
Disjunctive exchange relates to the effects of trade from the point of view of economic development. This concept is related to the so-called resource curse. Does a country or region that specializes in the exports of natural resources tend to suffer from less growth or distorted economic development in comparison to a country that specializes in the exports of manufactured goods and services? The world-system analysis separates between core, semi-peripheral, and peripheral countries. Disjunctive exchange is an inherent characteristic of the system – both creating and maintaining the hierarchical international relations.
Nonequivalent exchange relates to various ways to measure the ecological contents of exports and imports. Is a country (or region) a net importer or exporter of an environmentally relevant aggregate, such as energy, material mass, land use, or pollution?
Exchange can be unsustainable in the sense that it hurts the ecological sustainability locally or nationally. Trade can also be ecologically unsustainable for both partners involved and even threaten the global social and ecological system.
Disjunctive Ecological Exchange
Stephen G. Bunker’s book from 1985 Underdeveloping the Amazon: Extraction, Unequal Exchange, and the Failure of the Modern State contains a chapter “Toward a Theory of Ecologically Unequal Exchange.” The book and a related article published in 1984 (Bunker 1984) are seen as the first effort to establish a concept and theory of EUE. Bunker argues that “when natural resources are extracted from one regional ecosystem to be transformed and consumed in another, the resource-exporting region loses values that occur in its physical environment; these losses eventually decelerate the extractive region’s economy” (Bunker 1985, 22). Paradoxically then, the efforts to develop the Amazon Basin has resulted in its underdevelopment.
Bunker’s theory combines a concept of nonequivalent exchange with a version of disjunctive exchange. The nonequivalent exchange between an “extractive” and a “productive” economy leads to underdevelopment in one and development in the other. Since there are historical examples of how economies, which have been net exporters of natural resources, still have managed to avoid underdevelopment, it is not evident that being a net exporter of natural resources necessarily involves a disjunctive exchange.
Bunker and Andrew J. Jorgensen have continually deepened and broadened the world-system-inspired studies of ecologically unequal exchange. In an overview article, Jorgensen argues that “ecologically unequal exchange theory helps to address key limitations of both the treadmill of production and ecological modernization approaches, most notably their lack of attention paid to how structural and unequal relationships between nations influence environment and development.” He emphasizes the need for greater integration between ecologically unequal exchange theory and environment and development perspectives (Jorgenson 2016b, 227).
In all trade two things are to be considered in the commodity sold. The first is the matter, the second is the labour employed to render this matter useful. The matter exported from a country is what the country loses; the price of labour exported is what it gains. (Cited in Andersson 1976, 25)
A country was thought to develop its “arts” and industry by exporting labor- and skill-intensive goods and services and to maintain scarce natural resources by importing “matter,” goods only slightly processed. According to the mercantilists, foreign trade was a means by which one country could strengthen its economic growth and political power at the expense of its rivals, and the most important aspect of the trade was the type of commodities imported and exported.
Since the mercantilists, several critics of the classical free-trade position have adopted a similar view. One needs only mention Friedrich List, “the apostle of economic nationalism,” who prescribed protection of the nascent manufacturing industries and cheap imports of food and raw materials. Other variants of disjunctive exchange are Johan Galtung’s “asymmetric exchange,” where “trade, or interaction in general, is symmetric, or on equal terms, if and only if, the total inter- and intra-actor effects that accrue to the parties are equal.” Among these effects, Galtung counted exports of manufactured goods or raw materials, pollution, depletion, and exploitation (Galtung 1971, 38).
“The Resource Curse” and the “Dutch Disease”
The concept of resource curse relates to the finding that countries rich in minerals and other natural resources counterintuitively tend to have a poor or distorted economic growth. Several studies have evaluated the effects of resource wealth on a wide range of economic outcomes and offered explanations for why a resource curse is likely to occur. Factors that often have been found to influence the risks are how the income is spent, the kind of government and institutions, the sort of resource, and the early or late industrialization (Venables 2016). Especially, if the resources – such as guano, oil, or diamonds – can be appropriated by those who wield political power, the risk for coup d’états and wars is high.
Throughout the twentieth century Suriname’s economy was dominated by bauxite, but the industry declined as Suriname neared the next century. Gold and then oil became the dynamics for the economy in the early twenty-first century. On the back of gold, oil, and at decreasing levels, alumina exports, the economy expanded from under $1 billion in 2000 to a little over $5 billion in 2014…
As long as the commodity boom ran, revenues flowed into state coffers and bloated employee rolls could be maintained. Commodity largesse also meant that inefficiencies could continue without consequences. Moreover, outside advice was ignored. As the 2016 IMF Article IV report … observed: “During the boom there was no institutional arrangement to save resources for future prices corrections, and implementation of IMF advice on strengthening the policy framework was limited. Suriname has thus had a much sharper recession, steeper exchange rate deprecation, and larger rise in inflation and government debt than most commodity exporters.” (MacDonald 2017)
A somewhat unexpected example of disjunctive exchange, which can be interpreted as ecological, was that between England and Portugal in the eighteenth century. The Methuen Treaty of 1703 has gained a special historical significance, since the exchange resulting from this treaty constituted the empirical counterpart to David Ricardo’s famous example of how trade in accordance with the principle of comparative costs benefits both parties. The substance of the treaty consisted in permitting the entry of English woollen manufactures into Portugal, whereas Portugal’s wines were to be admitted into England at much lower tariffs than wine from France and other countries.
In Portugal the imports of English woollens quadrupled, eliminating the entire domestic production. At the same time the exports of wine grew rapidly, eliminating both the English domestic production and imports from France. Portugal lost the most dynamic sector at the time and strengthened the position of its landowning, feudal class. But England’s concentration on the cloth industry was essential for the process of industrialization. England got “matter,” wines, and Brazilian gold, in exchange for “arts,” “labor,” and cloth (Sideri 1970, 42–49).
However, the fact that some countries, which have been heavily dependent on exports of “matter,” still managed to avoid the resource curse shows that the mercantilist position cannot be generalized. Three examples of countries that have strengthened their belonging to the “North,” despite their dependence on material exports, are Finland, Norway, and Australia.
Finland’s economy used to be dominated by exports of forestry goods – tar, sawmill products, pulp, and paper. However, it managed to create a coherent forest industrial block and to diversify into several high-tech branches. Norway has been able to create the world’s largest sovereign wealth fund saving the proceeds from its oil exports. The fund has been used both to stabilize the economy and to provide a considerable income stream for the future.
Australia – named “the wonder down under” by The Economist (2018) – has been growing more years in a row without a recession than any other OECD country. A crucial reason for this must be ascribed to the prolonged and fast economic growth in China – the main market for Australian exports. The most important export item has been iron ore, Australia’s share of global exports being almost 60%. It has also been a major exporter of wheat, beef, wool, gold, aluminum, natural gas, and coal. Despite this overwhelming dependence on extractive activities, the Australian economy has managed to avoid the resource curse. Whether it has been a victim of disjunctive ecological exchange in relation to China can be discussed, but in comparison to other OECD- or raw material-exporting countries, its development has been outstanding.
Associated with the labor theory of value, the concept of unequal exchange of labor, or nonequivalent exchange, has lingered as a minor theme in the history of economic thought. We find the idea in the works of Smith, Ricardo, and Marx and in a long row of Marxian economic studies. The concept gained a large audience thanks to Arghiri Emmanuel’s book L’échange inégal. (Emmanuel 1969) (For a historical overview, see Andersson 1976, 38–42.)
In a recent work Imperialism in the Twenty-First Century, John Smith (2016) further elaborates a Marxist theory of unequal exchange of labor. He introduces the theme by looking at the production and distribution of three items: the T-shirt, the cup of coffee, and the iPhone. By outsourcing production to low-wage countries, rich countries manage to import considerably more labor than they export.
Instead of using labor as the meter of nonequivalence, ecological economists have used several environmental measures to describe and calculate an ecological unequal exchange: raw material equivalents, ecological backpack, ecological footprint, water footprint, emergy/dollar, embodied emissions, and displaced environmental loads.
Material Flow Accounts
The EU uses Economy-wide material flow accounts (EW-MFA) to provide an aggregate overview, in thousand tonnes per year, of the material flows into and out of an economy. EW-MFA cover solid, gaseous, and liquid materials, except for bulk flows of water and air. The general purpose of EW-MFA is to describe the interaction of the domestic economy with the natural environment and the rest of the world economy in terms of flows of materials.
While the EU trade balance in monetary values is more or less even, its physical trade balance is clearly asymmetric. The EU imports about three times more goods by weight from the rest of the world than it exports. Quantitatively the physical imports into the EU are dominated by fossil fuels and other raw products which typically have low values per kilogram. On the other hand, the EU exports high-value goods such as machinery and transport equipment. (Eurostat 2018)
Eurostat material flow accounts comprise actual weight of direct material inputs (DMI), as well as the direct and indirect raw material requirements of the traded goods and services, raw material equivalents (RME). In 2016 the actual weight of imported materials was slightly more than 3 tons per capita; in terms of RME, it was over 8 tons. The actual weight of EU exports was more than 1 ton, and in RME terms it was over 5 tons.
Furthermore, total material requirement (TMR) accounts have been used to include the unused extraction – e.g., unused overburden and waste rock in mining and logging residues left to the forests. Methodologically total material flows can be considered as an extension of the raw material equivalent flows, even if the flows are about twice as high as the raw material equivalent flows. The “ecological backpack” concept is defined as TMR, but is mostly used to calculate the weight of individual consumption habits.
In a study of the material flows for Finland for 2015, the direct material imports were 10 tons per capita, RME 32 tons, and TMR 72 tons, while the direct exports 9 tons per capita, RME 34 tons, and TMR 72 tons. Measured in these ways, the Finnish trade seems to be rather well balanced ecologically. The massive imports of fossil fuels were neutralized by the exports of wood-based items (Mäenpää et al. 2017). However, with particular countries, Finnish trade was highly unequal, since the imports of fossil fuels came overwhelmingly from Russia, whereas exports of forest industry products went mainly to other EU countries, the USA, and China.
There are several problems related to using weight as an indicator of unequal exchange. The environmental and social impacts are quite different depending on the kind of material. There are low-volume flows (e.g., toxic metals) with high impacts and high-volume flows (sand and gravel) with low impacts. Many difficult issues related to the material flow analysis are discussed in detail by one of its central researchers (Fischer-Kowalski 1998, 1999).
MFA has been used to assess whether an ecologically unequal exchange characterizes trade between the northern core and the southern periphery. Simon Jit Singh and Nina Eisenmenger cover this discussion and find that “MFA appears to be a useful tool to operationalise the notions of ‘unequal trade’ and ‘accumulation’ within the world system perspective.” They stress that accounting for flows of materials across regions is not sufficient unless interpreted within the politico-economic context. “The significance of MFA can become more apparent if it serves as a tool not only for ‘social metabolism’ but also for the ‘world system perspective’” (Jit Singh and Eisenmenger 2010, 78).
Land Use and Ecological Footprint Accounting
Land use is another indicator that has been central in measuring ecologically nonequivalent exchange. Several studies show how the extension of land use for the production of different primary products – such as soya, cocoa, palm oil, shrimps, and cattle – has influenced the environment, reduced the space for local lifestyles, and hurt the wild life. Large flows of biodiversity-threat-implicated products from Africa, Asia, and Latin America come into North America and Western Europe. How trade has been an important driver of deforestation in the South has extensively been made known by Jorgensen (2010).
Land use is related to the concept of biocapacity, the biological capacity of an ecosystem to produce renewable useful natural resources and to filter or absorb other materials, such as carbon dioxide. Biocapacity is measured in terms of global hectares. A global hectare is an adjusted unit that represents the average biological productivity of all productive hectares on Earth in a given year. It is possible to calculate the global hectares that it takes to satisfy the yearly consumption of a population.
A comprehensive way to measure biocapacity and the land and water area required for the consumption of a population is the ecological footprint (EF). The ecological footprint accounting (EFA) was established by Wackernagel and Rees (1996) in 1996.
The EFA has been further elaborated by the Global Footprint Network. The network continually publishes the ecological footprints of practically all countries, as well as for the Earth as a whole. “[T]he simplest way to define ecological footprint would be to call it the impact of human activities measured in terms of the area of biologically productive land and water required to produce the goods consumed and to assimilate the wastes generated…Ecological Footprint accounting measures the demand on and supply of nature” (Global Footprint Network 2018).
The EFA shows a close connection between the ecological footprint and the GDP per capita. It also shows that there are many rich (but also poor) countries that have an “ecological deficit,” that is, they consume more biocapacity than is available inside their own territories. One can therefore suggest that these deficits are reduced thanks to imports of biocapacity – maybe from poor countries that have no other option than to export part of their biocapacity. This would be a clear instance of an ecologically unequal exchange. This possibility was pointed out already by Wackernagel and Rees and has been further elaborated and measured by several researchers (Torregrosa-López et al. 2007).
James Rice, describing ecologically unequal exchange as disproportionate appropriation of environmental space measured in terms of ecological footprints, found, based on data for 137 countries, that low- and middle-income countries tend to be victims of EUE. Although they themselves consume less environmental space than the high-income countries, they still are net exporters of biocapacity. “The results contradict neoclassical economic thought. We find trade shapes uneven utilization of global environmental space by constraining consumption in low and lower middle-income countries” (Rice 2007, 1369).
Net export of ecological footprint increases with higher relative abundance of the environment (biocapacity per capita).
Net export of ecological footprint increases with less stringent environmental policy.
Rich countries are more likely to become net importers of ecological footprint.
Net export of ecological footprint decreases with the greener production and increases with the greener consumption.
The higher the biocapacity per capita and the less stringent the environmental policy, the higher is the net FDI inflow in case of EF net exporting countries.
These, and similar results from other studies, answer the question put by Daniel Moran et al. who, using EF as a pivotal indicator, doubted that there existed a systematic ecologically unequal exchange between low-income developing nations and wealthy developed nations. Instead they asserted that “high income nations are mostly exporters, not importers, of biophysical resources” (Moran et al. 2013, 185).
Dorninger and Hornborg (2015) took issue with the method used by Moran et al., and although skeptical to environmentally extended multiregional input-output analyses, they maintained that current research on EEMRIO-based flows of embodied materials, energy, land, and labor in international trade confirms the theory of ecologically unequal exchange.
An interesting study combining ecological footprint accounting with accounting in terms of labor was made by Jit Sing and Ramanujam. They focused on the Nicobar Islands in the Bay of Bengal from 1880 until 2000. Since the islands represent a small area that has been specialized in the same product – coconuts and copra – all the time, it was possible to make rather exact calculations of embodied labor, land, and energy in the exports of copra and the imports of cloth and rice. During the British rule, the Nicobar Islands were disadvantaged in terms of land and megajoule. Under independent India, the exchange value of copra in terms of rice improved considerably, thanks to a copra price support scheme and to the supply of rice at subsidized rates. In terms of embodied labor, the Nicobarese were always a big gainer. In 2000, for 1 ton of rice, the islands paid 51 man-hours and received 758; for 1 ton of cotton textiles, they paid 1087 man-hours, receiving as much as 16,422. The authors contend that it would be difficult to view the Nicobarese as victims of this exchange. Coconuts were in abundance and land was not a limiting factor (Jit Sing and Ramanujam 2010, 35).
Energy, Emergy, and Exergy
Efforts to use energy as a descriptive or normative measure of economic value have a long, although hidden away history (Martinez-Alier 1987). As a measure of value transfers between nations, the term emergy – “embodied energy” or “energy memory” – was developed by Howard T. Odum. He defined emergy as a measure of energy used in the past. “The unit of emergy (past available energy use) is emjoule, as distinguished from joules used for available energy remaining now.” Odum calculated differences in the emergy/dollar ratios between different parts of the world and concluded that the periphery was being underpaid for the emergy content of its natural resources (Odum Howard 1995).
This means that every dollar that circulates between these two countries transfers 11 times more real wealth to Sweden from Nicaragua than what is transferred in the opposite direction… Trade between Nicaragua and Switzerland favors Switzerland with approximately 22 times more real wealth. (ibid. 59)
According to Rydberg, trade that maximizes profits in terms of money is not geared to fairness. When trade is not equal in emergy terms, it maintains inequality in the world. “If our prosperity and sustainability are dependent upon draining other nations and regions of their resources and the production capacity of their ecosystems, then our kind of wealth creation and ‘sustainability’ must be considered fatally flawed” (ibid. 60).
The book, The Power of the Machine, written by Alf Hornborg, contains a chapter called “The Thermodynamics of Imperialism: Toward an Ecological Theory of Unequal Exchange.” Hornborg objects to Odum’s use of emergy as a measure of unequal exchange. “The notion that the dissipated energy is somehow still there in the object only confuses things” (Hornborg 2001, 41). The correction Hornborg makes changes the perspective. He prefers the concept of exergy – the part of energy that is available for mechanical work. Exergy is a standard concept of thermodynamics and relates to entropy. “Up to the point where the final product is sold, there is a negative correlation between the price and the proportion of the original exergy that is left in a set of processed substances. The more of the original exergy that has been dissipated, the higher the price” (ibid. 42).
Calling trade exploitative … is more than a value judgement. It is an inference based on the Second Law of Thermodynamics. If production is a dissipative process, and a prerequisite for industrial production is the exchange of finished products for raw materials and fuels, then it follows that industrialism implies a social transfer of entropy… The net transfer of “negative entropy” to industrial centers is the bases for techno-economic “growth” and “development”… The ecological and socioeconomic impoverishment of the periphery are two sides of the same coin, for both nature and human labor are underpaid sources of high-quality energy for the industrial “technomass.” (ibid. 11)
Since the anthropogenic exergy use is in the order-of-magnitude of 1% of the global exergy consumption of the material earth and can be dominant for some terrestrial processes, the budget of cosmic energy can be regarded as a necessary indicator for ecological evaluation as it raises a unified thermodynamic metric for objectively evaluating resource depletion, environment degradation and ecological overshoot and provides an essential measure of “use scarcity” of the real power driving the earth system. (Chen and Chen 2007, 373)
Pollution and Embodied Emissions in Trade
[I]f consumption is assumed as the key economic force ‘steering’ the environmental transformation, the assessment of the environmental performance of a national economy requires us to make the distinction between environmental costs borne and caused by a nation, and therefore, to expand the scale of analysis beyond the national political frontiers. Inter-country flows of goods and services (trade) and transboundary flows of pollutants are the two main ways by which international links can be established between local consumption and foreign environmental degradation, or vice versa. (Muradian et al. 2002, 52)
The authors define “displaced environmental loads” as environmental pressures, such as pollution, land transformation, and resource depletion, which are linked to international trade. They calculated the embodied emissions in trade for different pollutants and presented the balance of embodied emissions in trade, as well as the environmental terms of trade for different regions of the world. The results did not unambiguously confirm that the periphery is subjected to an ecological unequal exchange, since even though Western Europe and Japan had a positive balance and improving ETT in relation to the periphery, the opposite was the case for the USA.
However, the authors found an increase in the embodied emissions over time that indicated an increasing environmental displacement in the industrialized world. Therefore, the environmental Kuznets curve did not necessarily reveal a decoupling between economic growth and environmental degradation, but rather was the result of an increasing transfer of environmental loads abroad as countries become richer.
Christina Prell examined the distribution of pollution and wealth over a 20-year period. She studied pollution produced inside a country as well as pollution triggered along global supply chains. The pollutant she chose was sulfur dioxide. Core countries consume more pollution-intensive goods that are produced around the world and trigger pollution along global supply chains. Furthermore, they also generate high amounts of pollution within their own countries. “Said differently, core countries may indeed disadvantage others though patterns of trade, but they are also experiencing environmental costs at home as well” (Prell 2016, 119).
Kanemoto et al. (2014) found that the Kyoto Protocol targets were undermined since countries – mostly developed – that managed to holding down their emissions often increased their imports of embodied CO2 from less-developed countries. The study concluded that “if regulatory policies do not account for embodied imports, global emissions are likely to rise even if developed country emitters enforce strong national emission targets” (Kanemoto et al. 2014, 58).
14%–30% of air pollutant emissions in the South were caused by consumption in the North in 2007. There is a large ‘pollution deficit’ between the North and South, which significantly increased during the period 1995–2007, that favors the theory of ecologically unequal exchange. (Peng et al. 2016, 147)
A large proportion of the environmental load of Dutch private consumption takes place abroad. For greenhouse gases this amounts to 49%; for pesticide use to 56%; for summer smog to 61%; for eutrophication to 64%; for acidification to 74%; and, for land use to 84%. (Nijdam et al. 2005, 167)
Most land use was found to take place in developing countries, whereas most emissions occurred in industrialized countries.
Although water is a critical resource for the existence of life, and access to fresh water is becoming scarcer, embodied water in trade has seldom been an object for investigation. An exception is a study by Jared B. Fitzgerald and Daniel Auerbach on water footprints and unequal exchange. The authors define the water footprint of production as “the amount of local water resources that are used to produce goods and services within a country.” The water footprint allows researchers to examine water used in the entire production process by taking into account virtual embodied water as well as the origin of water usage.
Instead of direct exploitation, our results elucidate disparities within a world economy where there is inequality in trade relationships in that high-income countries are able to benefit their water resources through trade with other high-income countries. Lower-income countries, on the other hand, have disadvantageous positions in the global economy which do not allow them to displace the burdens on their water resources to the same extent. This demonstrates, we believe, a nuance to the ecologically unequal exchange literature. (Fitzgerald and Auerbach 2016, 13)
Ecologically Unsustainable Exchange
Ecological nonequivalent exchange, however measured, is inherent in any economic system. Areas with plenty of natural resources do export more materials, energy, or footprints than they import from densely populated urban localities. Nonequivalence does not necessarily imply that a country or region is a “victim” of unequal exchange even though it is a net exporter of natural resources. Actually, it can quite often be a net importer in terms of labor time.
Even if a region or country is the victim of a disjunctive ecological exchange, its economic development being weak or lop-sided, it can still be ecologically sustainable. It may even be the case that a country, whose economic growth is fast, runs a greater risk of being a victim of pollution and unsustainable extraction. Originally “development” referred to investments making land more valuable for humans, i.e., projects that increased the value of property. This generally implied economic growth, but at the same time destruction of existing ecosystems. From an ecological point of view, disjunctive exchange might hurt the fast-growing country more than the slow-growing.
Ecological sustainability includes everything that is connected with the Earth’s ecosystems. Amongst other things, this includes the stability of climate systems, the quality of air, land and water, land use and soil erosion, biodiversity (diversity of both species and habitats), and ecosystem services (e.g. pollination and photosynthesis). When it comes to the ecological systems, it is often possible to give quite a good definition of sustainability. Production of goods and services must not compromise the carrying capacity of ecosystems, i.e. nature has to be able to regenerate utilised resources. (KTH 2018)
Ecological sustainability is not necessarily linked to the territory of a nation. Mostly it refers to a certain locality, a region, a civilization, and even to the globe as a whole. However, since the political power is concentrated to the state level, and the responsibility for the preservation of sustainability lies with the national governments, it is meaningful to ponder whether a country is ecologically sustainable or not. If a country – or group of countries – can “import” sustainability at the cost of sustainability in other parts of the world, we can design this type of ecologically unequal exchange as unsustainable. This is evident if we live in a “full world,” which is threatened by different ecological disasters (Andersson and Lindroth 2001; Andersson 2010).
How do our different measures fit the need to indicate whether ecologically nonequivalent exchange also can be characterized as unsustainable exchange?
Material flow accounts are problematic indicators at the national level, although they can have serious effects locally. However, if a country is heavily dependent on the export of a resource – say oil and gas, iron ore, or forest products – the extraction of which exceeds the rate of new discoveries or regeneration, it would be appropriate to characterize the situation as unsustainable. The total weight of material exports would be a too vague indicator, since we do not have a measure of the limits to how much weight that could be used without damaging the sustainability.
Pollution would fit the purpose better. Some pollutants have a clear territorial effect; some of them crossing national borders. Some – such as carbon dioxide and freons – affect the globe as a whole, although different parts in different and uncertain ways. Trade that involves local pollutants could be used to assess whether the trade is unequal and unsustainable, but to assign the global pollutants to trade of certain countries is more problematic. It is easier to show that, e.g., Chinese exports do cause pollution that seriously damages the land, water, and air of the country, than to assign the responsibility for carbon emissions between two trading countries.
On the basis of the following three reasons, this paper suggests that a country is responsible for the CO2 emissions associated with its imported production inputs. First, from the perspective of the adopted demand driven criterion, a country’s demand for imported production inputs is a main force that drives the origin countries of its imports to produce these products. Second, the imported inputs help to realize the domestic production of the importing country, and thus contribute indirectly to its income generation from domestic production. Third, in the context of global warming, incorporating this indirect benefit might help to discourage carbon leakage. (Ferng 2003, 128–129)
Ferng also estimated the amount of carbon “over emissions” of a country by subtracting the net amount of carbon sequestered by local ecosystems from the emissions calculated according to the benefit principle. Thus, a country can “export” sustainability to the world by improving its capacity to absorb carbon emissions.
Of the measures used to identify EUE, the ecological footprint fits an assessment of sustainability best. EF accounting comprises a conception of a limited capacity of the Earth to transform solar energy into biomass. It covers all renewable natural resources and the most important pollutant: carbon dioxide. A high ecological footprint in relation to the available biocapacity indicates that an ecosystem is unsustainable – unless it is able to “import” enough sustainability. Natural capital is depleted or degraded when there is an “ecological deficit” or “overshooting” in terms of ecological footprints. Strong ecological sustainability implies that nature’s capacity to reproduce biomass on a continuous basis is not contracting. Material flow accounting, overall pollution, and embodied energy can be complementary to EF accounting, but their connection to sustainability is vaguer. As Siche et al. (2010) have shown, reckoning in terms of emergy can come close to the EF indicator, but it is more difficult to estimate the limits to emergy use.
A problem of using EF accounting in order to assess the sustainability of a certain country is the fact that half, or even more, of the calculated footprints is due to the need to absorb the carbon emissions by forestation. If this need for forest land is disregarded, the world, and most countries, would seem to be sustainable. The damage caused by CO2 emissions affects the whole globe and only partly the emitting country and the country importing the goods causing the emitted carbon. EF, therefore, is only partly an indicator of how EUE affects the sustainability of the trading nations in question.
Countries with an ecological surplus that exceeds the net exports of biomass and sink capacity. Their ecological capital is intact or increasing. Australia, Brazil, and Russia belong to this group.
Countries with an ecological surplus smaller than their net exports. This implies a loss of ecological capital, in particular if the carbon footprint is small in relation to the deficit. Angola and Honduras are probably in this category. Indonesia and Costa Rica used to have a small reserve, but now belong to group 3.
Countries with an ecological deficit that nonetheless are net exporters. Their ecological capital is being damaged and reduced. Several African countries, such as Algeria, Kenya, Ghana, and South Africa, are in this group. So are most of the former soviet republics in Central Asia and Caucasus.
Countries with an ecological deficit larger than their net imports. Their natural capital decreases although they gain from a nonequivalent exchange of EF. Examples are the USA, Germany, China, India, and Egypt.
Countries with an ecological deficit smaller than their net imports. Their ecological capital is preserved thanks to an unequal exchange in terms of biomass and sink capacity. Ireland with a small deficit (and a large carbon-related footprint) is a possible example.
Countries with an ecological surplus and yet are net importers in terms of EF. They are able to preserve and even increase their sustainability both by a moderate use of their biocapacity and by enjoying imported capacity. Sweden and Finland, with large reserves, very likely belong to this group.
The world and most countries do have ecological deficits. The greatest number belongs to the groups 3 and 4. Of the large regions, Oceania and probably South America belong to group 1. Africa is in group 3, with Asia, Europe, and North America in group 4. If the carbon footprint is disregarded, Asia is the only continental region that still has an ecological deficit.
Countries in group 2 and 3 can be said to be victims of a “unilateral unsustainable exchange,” which damages their ecological sustainability. If they trade with countries in group 4, which, even though they are net importers, do not manage to reproduce their ecological capital, we may call the situation “mutually unsustainable exchange.” It implies that the stronger nations are not strong enough to maintain a unilaterally unsustainable exchange with the weaker nations.
Since ecological unsustainable exchange is not easily observable and most countries eagerly participate in a game of positional competition – economically, militarily, culturally, and ideologically – the risk for ecological overshoots is imminent. This risk is gravely reinforced by the capitalist accumulation imperative and by the status-driven consumerism spreading all over the world.
Free trade and free movement of capital imply that any agent rich enough may decide – directly or indirectly – how global biocapacity is used. The losers can be the less rich, the poor, other living beings, or future generations. Røpke (1994) and Gale (2000) argued from an ecological and justice point of view that there was a case for limitations on trade. International trade and anonymous multinational capital blur the responsibility for the ecological effects of production and consumption.
The more overexploited the ecosystems become, the more likely nonequivalent ecological exchange will be transformed into an unsustainable exchange. In a full world, the consequences of sharp income inequalities are fatal both socially and ecologically. The rampant commodification of all resources emphasizes the inequalities and spurs international rivalry as well as individual consumerism. The environmental space for the poor deteriorates, at the same time as the rich can buy at least temporary release from global ecosystems destruction. International trade in a full and unequal world is something very different from the story told by standard economics.
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