Hidden impacts of trade are far-reaching

A review of the international trade footprint on people and the planet shows about a third of the impact is displaced from rich to poorer nations.

Associate Professor Thomas Wiedmann, of the UNSW School of Civil and Environmental Engineering, and Professor Manfred Lenzen of the University of Sydney, have compiled a world-first conclusive synthesis of the environmental and social impacts of globalisation.

This means that if a country moves from producing goods domestically to importing them from China, its carbon footprint decreases - leading politicians to think that the country is cleaning up its act

Associate Professor Wiedmann

They used sophisticated computation to provide a bird’s eye view of the displacement of wealth-driven consumption into offshore production – highlighting effects such as increased child labour and environmental degradation at the area of production that may not be seen easily but which can have far-reaching consequences.

Drawing on an increasingly large pool of data, the study for the first time unveils the extent to which developed countries are outsourcing environmentally and socially burdensome production to poor countries.

It shows that, overall, about a third of environmental and social impacts from consumption in wealthy nations is displaced to developing countries, and this trend in outsourcing responsibility is increasing.

The findings are published in the leading journal Nature Geoscience.

Associate Professor Wiedmann, the study’s lead researcher, says indirect effects facilitated by often complicated supply-chains are mostly hidden from consumers, who generally do not know where the raw ingredients of their purchases stem from.  

“Carbon emissions are still accounted for on a territorial basis,” he says.

“This means that if a country moves from producing goods domestically to importing them from China, its carbon footprint decreases – leading politicians to think that the country is cleaning up its act.”

Such a convenient myth was debunked when Associate Professor Wiedmann, then with the Stockholm Environment Institute, and Professor Lenzen, were involved in a study to establish the UK’s carbon footprint, prompting the BBC to declare the UK ‘in delusion’ over its emissions, and forcing the UK’s Environment Minister to explain earlier statements praising the country’s decarbonisation.

Technological advances in footprinting, otherwise referred to as consumption-based accounting, are led by the University of Sydney’s Integrated Sustainability Analysis (ISA) team and a handful of organisations globally. The research is set to complement the current production-based focus by closing accounting loopholes.

Professor Lenzen, who heads ISA from Sydney’s School of Physics, says that social impacts are a relatively new area of research, but the findings paint a global picture of masters and servants.

“Many citizens of rich countries require the work of up to five poor people to satisfy their consumption,” Professor Lenzen says.

“Rich consumers like us are implicated in pollution and inequality all over the world, and people in poor countries bear the brunt of our large environmental and social footprints.”

He concludes: “Our new research clearly points towards a need for so-called consumption-based accounting – where a country’s environmental score includes its imports – and as such leaves no room for loopholes.”

The synthesis paper includes:

• Employment - Masters v Servants: For each Swiss person, three people work elsewhere to support their lifestyles. In Madagascar, 7 in 10 locals work full-time to produce exports for affluent people.
• Air pollution: An increase in health impacts in China come from air pollution linked to production for people in the United States. 
• Water scarcity: Almost 80 percent of the EU’s consumption of scarce water occurs outside its borders, with the largest pressure exerted in the stressed Indus Delta straddling Pakistan and India.
• Biodiversity: US consumption exerts threats to marine life in Southeast Asia; and biodiversity in southern Brazil – such as deforestation of the Amazon for soy production.
• Resources: Outsourcing to developing countries has meant most developed countries did not need to improve resource productivity in the past few decades.
• Child labour: In 2011/2012, almost 1 million children in India worked for exports alone.
• Safety: Per 100,000 workers in global supply chains, occupational health and safety incidents lead to the loss of US$2 million, 27,000 working days, 4,800 injuries and 12 deaths per year.

Story: UNSW media/University of Sydney Media