Doutoramento em Alterações Climaticas e Politicas de Desenvolvimento Sustentavel

Economia, regulação e mercados 2021/2022 - Yvette RAMOS 5th Jan. 2022

I.
For this individual assignment, I have selected the key environmental issue caused by the
Textile industry at European level that I find relevant to understand from both Environment
and Ecological Economics perspectives, as we know that the textile industry generates
disastrous socio-environmental impacts on a global scale, with one of the most significant
impacts on climate change and reinforcing socio-economic inequalities across the world.
In the standard economics field (Environment Economics) «Standard Circular Flow Model »,
the production and consumption flows are considered as infinite cyclical cash flows, with a
price game supposed to ensure the proper equilibrium in a continuous and automatic way,
whereas in the Ecological Economics (EE) « Expanded Circular Flow Model », the flow of
materials and energy necessary for the production of any good or service, which do not
circulate in the economic system, but through it, has to be considered (M. Harris and B.
Roach, 2017, Chapter1 p.7). This is what the Catalan Economist Joan Martínez-Alier calls the
“externalities”i : “the (finance) market does not value the externalities such as climate
change, noise, polluted water, etc. For this to be the case, emission allowances have been
created that can be traded.” The EE insists in the fact that environmental externalities are
not exceptions to the market economy, but the rule.
The textile industry brings together all the activities of the so called “textile value chain”
(Value Chain in Textile Industry, M. I. Khalilullah, Daffodil International University 2020),
including the design, manufacture and marketing of textiles and therefore, among others,
clothing. This industry covers a large number of trades along a production chain made up of
fabric and knitwear manufacturers, finished product manufacturers and distributors, who
transform fibrous raw materials into semi-finished or fully manufactured products.
Manufacturers of natural fibers and synthetic fibers intervene upstream, and therefore
outside this chain. In the 21st century, textile products are essentially consumer goods.
Ready-to-wear clothing represents an important and well-known part of this sector. The
textile and clothing industry uses part of the hydrocarbon derivatives to manufacture many
garments based on synthetic fibers, polyester, polyamides, acrylic fibers among others and
with the acceleration in the number of annual collections in the fashion trends, it is time to
analyse impacts of these activities and provide inputs from the EE perspective.
In order to formulate, implement and monitor public policies aimed at mitigating and/or
eliminating the environmental impacts of the Textile industry, it is necessary from my point
of view to recall a few data on the Externalities mentioned above.
Main contributions provided by the EE approach include the pollution factor (with chemical
usage, including Nitrogen fertilizers and phosphorous, insecticides and herbicides used in the
soil mainly in production and waters pollution with all the impacts on the public health), the
volume of freshwater consumed, the energy consumed, the CO2 emissions in the whole
value chain (from production of raw materials to logistics, transportation and distribution),
the waste creation (for ex. the “deadstocks” simply destroyed in the luxury fashion industry
as some of the stakeholders want to preserve product scarcity and exclusivity of their
brands), land usage, and of course all social impacts including barriers to decent work and
economic growth, gender equality and increased inequalities.
The Textile industry is one of the most polluting industries in the world (Ellen MacArthur
Foundation report, 2018ii) with a carbon footprint (of textiles) estimated to 1.2 billion tonnes
of “CO2 equivalent” in the world in 2015, or 2% of the global carbon budget. Namely clean
 Doutoramento em Alterações Climaticas e Politicas de Desenvolvimento Sustentavel
Economia, regulação e mercados 2021/2022 - Yvette RAMOS 5th Jan. 2022
water and sanitation, life below water, climate action and good health and well-being are
SDGs that are directly relevant to consider when designing dressing public policies to
address these issues. At the European level iii, around 4-6 % of the EU's environmental
footprint across a range of impact categories is caused by the consumption of textiles. 85 %
of the primary raw materials used, 92 % of the water used, 93 % of the land used and 76 %
of the greenhouse gas emissions caused by the production of textiles for European
consumption occur elsewhere in the world.
These main contributions mentioned above and in line with the EE approach would lead us
to design and implement public policies that help mitigate these impacts, addressing the
complexity of the value chain (Norgaad, 1988, page 57), while thinking not only about the
economic benefits but considering the humanity and the environment. And this means
consuming textile in a sustainable way. According to the 2015 Nielsen Global Corporate
Sustainability Reportiv, 66% of global consumers say they are willing to pay more for more
sustainable brands. So I strongly believe that through the sustainable development process
applied to the Textile industry in Europe as proposed by the Circular Economy Action Planv
for example, this can be achieved. This is also in line with the Management of natural capital
principles (Costanza and Daly, 1992; Goodland, 1995) that proposes to limit the scale of
human activities, while renewing the natural capital, “exploited in order to maximize net
benefit on a sustainable basis” but never prevent technological progress.

II/
My vision of sustainability is an understanding that complexity is not a pure technical issue
but a human issue embedded in a whole ecosystem that puts at the same level
environment, law, economics, technology engineering and science, humanities and is
driven by human-designed and led policies.
In that sense, it aligns with the definition of a complex process that meets the needs of the
present without compromising the ability of future generations to meet their own needs
(Brundtland, WCED, 1987).
As explained by P. Krugman in his article (2010, NYTimes, building a green economy), one
way to deal with negative externalities such as the ones seen in Part 1 of this assignment, is
to make rules as done in the early 1970s though the environmental legislations. However I
like to use the Expanded circular flow model (M. Harris and B. Roach, 2017, Chapter 1 page
7) that helps understand and apply indicators “out of the box”, that includes other factors
such as (1) recognition that ecosystems are essential in human well-being (2) recycling is
possible in a sustainable way (3) the economy depends much on the available natural
resources.

Indicators I would choose are thus bound to measuring human well-being on one hand and
measuring the limitations of natural resources on the other hand.

As the 2030 Agenda for Sustainable Development 1 provides us with 17 goals to Sustainable
Development linked with economic, social and environmental growth, I would select some
of these enabling human well-being and natural resources limits assessments. At the same

1
https://www.un.org/sustainabledevelopment/development-agenda/
 Doutoramento em Alterações Climaticas e Politicas de Desenvolvimento Sustentavel
Economia, regulação e mercados 2021/2022 - Yvette RAMOS 5th Jan. 2022
time, I like to think that all is interlinked and that we shall not only consider economical
values in all processes, but indeed a more qualitative equation that includes the “the
inherent value of nature” based on ethics, rights, justice, and other principles that are
embedded in our socio-cultural historical behaviors.

I would like to suggest specific indicators based on the determinants of well-being as

proposed by the figure below (Towards sustainable development: Alternatives to GDP for
measuring progress, 2009, P. Schepelmann, Y. Goossens, A. Makipaa), joined by the IPAT
principles.

Source: Deutsche Bank Research, 2006

I like the principle of the IPAT Equationvi (Ehrlich and Holdren, 1971; Commoner et al, 1971;
Chertow, 2008) that tries to embed multiple factors while determining environmental
impact (I) that are population (P), affluence (A) and technology (T) and I believe that could
bring a numerous value to what I am trying to measure, even though the model has been
limited to evaluation of a single variable measure of environmental impact (eg. Water
pollution).
To design the perfect indicators from my perspective, I would combine IPAT formula with
the determinants of well-being presented above, to bring in indicators that better help
measure my vision in terms of sustainability, and that could assess the 17 SDGs achievement
by 2030.
For example, a combination of IPAT with the Economic Well-Being on one hand and a
combined formula of IPAT with GDP on the other hand could be the 2 indicators I would like
to design to help measure these achievements.
i
https://www.letemps.ch/economie/joan-martinez-alier-suisse-vivre-100-pib
ii
https://ellenmacarthurfoundation.org/a-new-textiles-economy
https://www.ecotextile.com/2020122327182/features/new-bid-to-measure-fashion-s-carbon-footprint.html
iii
https://www.eea.europa.eu/highlights/private-consumption-textiles-eus-fourth-1
iv
https://engageforgood.com/2015-nielsen-global-sustainability-report/
v
https://ec.europa.eu/environment/strategy/circular-economy-action-plan_fr
vi
http://www.sustainablescale.org/ConceptualFramework/UnderstandingScale/MeasuringScale/TheIPATEquation.aspx
#one