Trade in the era of climate change and peak oil

• conventional economic support for trade has been based on

arguments about productive efficiency
• trade as a natural way to exchange virtually identical goods
across the globe in its historical context, which is
contemporaneous with a particular economic system and the
massive abundance of fossil fuels over the past 200 years.
• the close relationship between CO2 emissions and world
trade
• Amid the growing consensus that climate change is caused by
the burning of fossil fuels it is becoming inevitable that each
gram of CO2 emitted must achieve the maximum in terms of
human well-being
• Such a system is efficient at generating profits – by
concentrating production in countries with low wages and
low standards of environmental protection, and concentrating
consumption in the wealthier countries – but inefficient at
using the capacity of the planet to absorb pollution.
• The corporate supporters of free trade have been
quicker than the environmentalists to see that this is
where the discussion is moving and have begun a
debate about the relative advantage of food produced
locally in an energy intensive way versus that produced
in sunnier climes and then transported to our markets.
• This is often a false debate.
 Greening Trade Locally
From free trade to trade subsidiarity :
the extension of the concept of ‘subsidiarity’ into the realm
of production and consumption, so that we naturally tend to
look to purchase goods produced as close to where we live
as possible’ :
The principle of trade subsidiarity states that distance between
production and consumption should be as short as reasonably
possible…Thus, market areas for goods and services that are
relatively easy to produce, such as staple food crops, should be the
most localisted. Goods that depend on highly capital-intensive
production, such as cars and computer chips, could in principle
also be manufactured on a highly localised basis, but in practice
this would be highly inefficient and their domestic market area
would therefore need to be larger, perhaps even the size of the EU.
 Greening Trade Locally (2)
In determining where goods should be produced there are
two important variabels to considers:
 The physical inputs that are required to make goods.
 And the amount and type of work required.

If we simplify these into local versus gobal, and labour-

intensive, we generate four types of good:
1. Local, non-intensive goods such as seasonal fruit and
vegetables and other raw materials which can be grown
without much complex labour input;
2. Global, non-intensive goods, which do not need much
labour but require a different climate from our own;
 Greening Trade Locally (3)

3. Local, complex goods that require skill and time to

produce but not the import of raw materials;
4. Global, complex goods that need technical expertise
and considerable time to produce and for which materials or
the size of market suggest a problem with local production.
 Greening Trade Locally (4)
From fair trade to the sufficiency economy :
A watchword of sustainable economiecs is self-reliance-not
self-sufficiency, which I believe holds very few attractions. Self-
reliance entails combining judicious and necessary trade with
other countries with an unapologetic emphasis on each country
maintaining security of supply in terms of energy, food and even
manufacturing.

Many who are concerned about the injustice surronding global

trade and the massive carbon emissions associated with it have
concluded that local, selfreliant economies are the most positive
way forward.
 Greening Trade Locally (5)
In particular from the work of Gandhi :
whose political action was directed at liberation from colonialism
but also from the version of neocolonalism that he identified in
the global system.

 Gandhi’s most relevant contribution is his concept of

Swadeshi,or self-reliance,which offers a prototype for the
localization of the economy. Gandhi called for a self-reliant :
economy based on system of production and consuumption of goods that
was locally based and human-focused rather than dominated by the
market.
 Greening Trade Locally (6)

Swadeshi carries a great and profound

Meaning. It does not mean merely is
Certanly there in swadeshi. But there is
Another meaning implied in it which is
Far greater and much more important.
Swadeshi means ‘reliance on our own
Strength’. ‘Our strength’ means the
strengthOf our body , our mind and
our soul.

This call for self-reliance was a clear inspiration to the self-sufficiency

movement in Europe and the US from the 1960s onwards, with its impetus
to move back to the land provide for one’s own needs.

Following its negative experiences on the boom-and-bust roller coaster, Thailand has now
Stepped aside to follow its own path to human-Scale development, as reported in the
Latest (2007) UNDP Human Development Report for that country.
 Greening Trade Locally (7)
The King of thailand, who has inspired this Philosophy, describe it as a middle
way – neither extreme isolation from the outside world, not leaving one self
vulnarable to the forces of globalization :

‘This self –sufficiency does not mean that every family

must grow food for themselves, make clothes for them
selves; that is too much. But in a village or subdistict
there sould be a reasonable amount of sufficiency. If
they grow or produce something more than they need
they can sell them. But they do not need to sell them
very far; they can sell them in nearby places without
having to pay high transport cost’