Globalised trade system at what price for natural resources?

02.06.2015 - Pressenza Hong Kong

Globalised trade system at what price for natural resources?
Effects of mal-distribition of resources (Image by Nazmus Sadat)

Our entire life is founded around natural resources in the form of raw, mined and extracted materials, water and energy, as well as the farming lands available to us all living our life on Earth. These gifts are the basis of all life on our planet.

By Nazmus Sadat*

We humans are also part of nature, which provides us with all resources necessary for life: energy for heat and cooling thanks to electricity and for mobility; we have wood for furniture and paper products; cotton for clothing; construction materials for our roads and houses; food of al kinds and pure water for a healthy life.

But the natural resource base our societies are built on is in severe danger of overexploitation and collapse. Due to the growth of world population, continued high levels of resource consumption in the developed world and rapid industrialization of countries such as China, India and Brazil, worldwide demand for natural resources and the related pressures on the environment are steadily increasing.

Many of the problems that threaten mankind’s survival on the planet result from the increased consumption of energy, water and raw materials, the increased production of waste and emissions and the increased human use of land areas.

If we look over the scenario of Europe first, we see, around 36kg of natural resources are extracted per person per day, yet a European consumes 43kg per day statistics show us. But this consumption is even higher in a few other regions of the planet. Such as, an average North American consumes around 90kg per day and an inhabitant in Oceania consumes about 100kg per day. At the same time, if we look into the consumption patterns of Asians and Africans, we find an Asian consumes 14kg per day which is equal to the amount extracted per person here and an African’s average consumption is 10kg per day, compared to the extraction of 15kg per day. Even, inhabitants of other rich countries consume up to 10 times more than people in developing countries. So they need more resources imported from other regions of the world to maintain their levels of consumption. The others regions indicated are the Least Developed Countries and Developing Countries which are hard-hit victims of the imbalanced distribution of natural resource use.

The environmental consequences of this over-demand are already clear. Global ecosystems and the ecological services they provide are being degraded; fresh water reserves and forests are shrinking, many species are under threat of extinction and fertile land is being eroded. At the same time, the extraction of many non-renewable resources is already reaching or nearing a peak. Where “Peak-oil” is just the most prominent example.

Even though, we are contributing to the critical environmental situation by unsustainable extraction and consumption, only around a quarter of the world’s population have a high enough purchasing power to benefit from the prevailing system of global resource extraction and resource trade. Eighty percent of the world’s population still live on less than US $10 a day and legitimately demand further growth and increased material consumption in the future for themselves.

In fact, Global Trade today reinforces inequalities in resource consumption. Its system allows countries and regions with high purchasing power to increase resource consumption beyond their own national resource capacities. This means that in recent years, more and more countries have become net-importers of natural resources and products and thus consume more than would be possible based on domestic resources only.

These countries run an “ecological trade deficit”. It may not be regarded as problematic that countries with poor natural endowments have net resource imports. However, the inequalities in resource use facilitated by the current patterns of world trade raise concern as they may jeopardize sustainable and equitable development in all regions of the world. In order to ensure material welfare for all people, trade could help redistribute resources from countries with a high extraction to countries with lower extraction. Currently however, the opposite is generally the case and international trade is not balanced, but instead reinforces the inequalities in per capita use of resources.

On the other hand, as international trade requires goods to be transported between the countries of extraction and production to countries of consumption, growth in trade has significantly increased greenhouse gas emissions from these transport activities. Out of the total energy used in world transport, 95% is still supplied by petroleum. As a result, around a quarter of global energy-related greenhouse gas emissions originate from transport activities (including transport that isn’t trade related).

Appropriation of foreign agricultural land is another relatively new but accelerating trend in today’s globalised economic system which sees increasing trade and investment by richer emerging countries in developing countries on a one-sided basis. One component of this trend is the large-scale land deals in which governments and politically influential companies buy or lease millions of acres of farmland abroad to grow foodstuffs and biofuel crops instead of buying these crops on the world markets. Some argue that such deals may increase economic growth, government revenues and opportunities for economic development in the target countries. Yet they may also threaten local food security, displace local populations, create political unrest and increase land prices.

There are remarkable number of instances of the suffering of poor or developing countries caused directly by developed countries. Among them: Nigeria, Peru, Malaysia and Indonesia have had shocking experiences.

Nigeria is the largest oil producer in Africa and 11th largest in the world. In 2004, 17% of all Nigerian oil exports – more than two million tonnes – went to the European Union. Crude oil production in 2004 was 2.5 million barrels per day, of which an average of one million barrels per day were produced by Shell. The country has significant oil reserves and even greater gas reserves. However, most Nigerians have not benefited from these resources and in real terms Nigeria is now one of the poorest countries in the world. The population in the Niger delta suffers from multiple health problems and the land is heavily polluted. Gas flaring also has severe health consequences there.

Palm oil is an edible oil extracted from the fruit of oil palms. It is used in food products, cosmetics and increasingly as a biofuel. Indonesia and Malaysia are the world’s largest producers. Between 2000 and 2006 imports of palm oil products into the EU almost doubled from 1.2 to 2.2 million tonnes. Six and a half million hectares of land have already been converted to palm oil plantations in Indonesia and a further 20 million hectares for palm oil have now been earmarked for further expansion. Palm oil production is having a devastating environmental and social impact.

In 2007, Indonesia was ranked as having the world’s third highest greenhouse gas emissions, because of the draining of its peatlands and conversion of tropical forest to agriculture, largely palm oil for export. Biodiversity loss is another major problem associated with palm oil. Key habitats for numerous species, including iconic ones such as the orang-utan, are being wiped out by oil palm development. These are just a few of a number of negative effects of palm oil production.

In 2008, approximately 1.3 million tonnes of copper was mined in Peru. In 2007 and 2008, 31% and 21% respectively of Peru’s copper exports were sent to Europe. Peru has about 10 copper mines, the biggest of which is the Antamina Mine in Huari (400,000 tonnes). There are copper smelters at Ilo (320,000 tonnes) and La Oroya (65,000 tonnes). But many communities in Peru have protested against mining because production of copper requires huge amounts of water (e.g. for electrolysis) and water shortages are a major problem there. In September 2007, the US-based not-for-profit organization Blacksmith Institute, which focuses on identifying and solving pollution-related problems in the developing world, listed the town of La Oroya (35,000 inhabitants) in Peru as one of the top ten most polluted places on earth.

A poly-metallic smelter has been the main cause of the released toxins. A survey conducted by the Peruvian Ministry of Health in 1999 revealed that blood lead levels among local children were triple the limits set by the World Health Organization (WHO). Sulphur dioxide concentrations also exceeded the World Health Organization guidelines by a factor of ten, and vegetation in the surrounding area has been destroyed by acid rain due to these emissions.

Achieving sustainable patterns of resource use is therefore a key part of achieving sustainable development. Resource consumption and material welfare are inseparably linked to global justice, and – at the moment – there is totally unfair distribution of natural resources between the different societies of our planet. Currently, Europe and other economically rich Western countries appropriate far more than their sustainable and fair share of global resource use. They need to take immediate measures to move towards more sustainable uses of our common natural resources.

Developed countries need to pay attention to the countries that feed them, keep them developing and help them flourish as speedily as possible.

A strategy of reducing resource use will not only diminish the pressures on the global environment, running a resource efficient economy will also be a competitive advantage in a world with rising commodity prices and increased resource constraints. Achieving a sustainable level of resource use globally does not mean that we should go back to the Stone Age. However, we need to find new models of resource use, which ensure a high quality of life for all people on our planet.

Reference:Adopted and summarized from “OVERCONSUMPTION? Our use of the world’s natural resources” by the Friends of the Earth Europe.

*Nazmus Sadat, from Bangladesh University of Engineering and Technology, is now working with the organisation Sustainable Bangladesh.
Email: nazmus_sadat99@yahoo.com

 

Categories: Asia, Economics
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