To achieve net-zero carbon emissions we need global trade to be smaller, shorter, and slower. To do this, we need to reconsider our dependence on materials and products sourced from around the world.
As Brexit negotiations continue and the UK makes trade agreements with countries such as Vietnam, Japan and Singapore, it’s an important time to reflect on UK trade policy in the context of achieving zero carbon trade.
There is no doubt that trade can be beneficial and has helped lift many people out of immediate poverty (as reported by UN) but the social and environmental costs are often overlooked.
The carbon cost of trade
While domestic emissions of carbon dioxide and other greenhouse gases have fallen in some EU countries (including the UK), global emissions due to industrial processes, transport and manufacturing and construction have increased according to the Greenhouse Think Tank by 174%, 71% and 55% respectively. Additionally, roughly one-third of global emissions are embodied in goods and services that are traded internationally.
Transport associated with trade equates to 36 million tonnes of carbon emissions and UK exports are twice as likely to be airfreighted compared to Germany. Shockingly, Ireland is the only country in the EU which exports a higher percentage via air.
While Boris Johnson’s Jet Zero Council (JZC) to cut aviation emissions would have huge implications on the UK’s trade carbon footprint, experts have called jet zero severely underfunded. They also consider that long-haul electric or hydrogen planes are unlikely before the middle of the century, which will be too late.
Despite the direct impact of trade on carbon dioxide emissions, it is excluded from negotiations under the United Nation’s Framework Convention on Climate Change (UNFCCC) and is not included in the Paris Agreement.
Highlighting the issue, the Green House Think Tank has proposed a Zero Carbon Trade and Investment Toolkit which suggests three trade policy interventions to achieve zero carbon:
- reducing the scale of trade and material consumption;
- localising supply chains; and, when possible,
- shipping goods by sea rather than airfreighting.
This starts with addressing ‘pointless trade’, like-for-like trade which does little for either importer or exporter and which is bereft of environmental considerations. The tendency to ‘buy low, sell high’ in exports and imports is driven by a consistent trade deficit.
Here are some of the culprit
As it stands, the UK exports more scrap steel to Turkey than it re-melts each year and evidence suggests that the UK would likely meet its steel demand from domestic scrap. If blast furnaces were replaced by regional electric arc furnaces, the UK could be self-sufficient in steel which would decarbonise one of the UK’s largest polluters.
Similarly, 125,000 tonnes of salmon were exported last year compared to 101,000 tonnes which were imported. This made up some 74% of the UK’s fish-trade carbon footprint. If the UK could supply domestic markets first and move exports from air to sea, we could reduce transport emissions by 300 to 400 thousand tonnes for salmon alone. Additionally, over 35,000 tonnes of crabs and lobsters were exported while 54,000 tonnes of shellfish was imported, mainly prawns. By eliminating pointless trade, reversing the UK’s preference for prawns over crabs and ending the airfreight of fish would reduce our fish-trade carbon footprint by 90%.
Linked to this, the UK imported over 430,000 more tonnes of apple and pears than it exported in 2019, despite having a perfectly capable climate for growth. To reach zero carbon in the food sector we must stop airfreighting fruit and vegetables by changing the types of products we import or import them as juice, dried or canned so they can be shipped.
In the wake of Black Friday, clothing is another important area. Clothing’s trade footprint is often understated because raw materials are exported to make textiles, before being shipped to be made into garments followed by a final shipment for sale. Sourcing textiles for disposable fashion is incompatible with a zero-carbon world. We must therefore encourage fewer, higher quality garments produced locally or imported by ship. As such, clothing should be designed to modify, repair and adapt which could be achieved by introducing mandatory 5, 10 or 15 year guarantees or introducing a ‘Right to Repair’ with manufacturers obligated to repair.
So what can we do?
If we are to be successful in tackling climate change we must also stop constructing things which will burn fossil fuels, such as gas power stations or gas heating systems. This could be achieved by only approving planning applications which are zero-carbon compatible, offering state support for a transition of workers and retrofitting high carbon assets.
Furthermore, it is important to ensure all embedded emissions are required as part of import and export declaration. A carbon tax could be applied to emissions embedded in imports and tariffs introduced on goods which don’t meet sustainable production standards. A sector-based international sustainable production certification scheme would also play an important part.
In addition to transforming business, the Government must change the rules of the game by replacing GDP with wellbeing, reforming the UK Treasury’s Green Book to compare greenhouse gas implications and cost, and require businesses with a turnover above £1m to have a carbon audit and ‘Road to Carbon Zero Plan’.
Finally, government subsidies to aviation must be phased out and emissions taxed to discourage consumers and incentivise manufacturers to offer low-carbon alternatives.
In sum, the current global economic, trading and material system in which we are engulfed strengthens the inertia of ‘business as usual’. This report offers food for thought about an overlooked aspect of climate policy. To achieve net-zero we must advocate a shift to smaller, slower and shorter global trade.
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