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The Grass is Greener, by David Campbell

Posted by: | May 5, 2014 Comments Off on The Grass is Greener, by David Campbell |

Internalizing the environmental costs of importation is an ingenious and nifty idea, but it is not necessary to justify importing bamboo.  All raw materials, including domestic inputs, require transport.  The internalization principle is universally applicable, and all businesses can opt—and perhaps should opt—to internalize the environmental impacts caused by their supply-chain activities.  But the law does not require this.  Applying this principle specifically rather than universally can position superior materials like bamboo at a serious and unfair disadvantage to the detriment of all.  For instance, consumers on a budget may be forced to buy petroleum-based plastic products rather than more expensive bamboo products simply because the bamboo products include internalized costs and the petroleum ones do not.  This could be true even if production of the petroleum products required twice the environmentally-harmful transportation impacts than what is needed to produce the bamboo products.  If both or neither products included the internalized costs of mitigating the environmental harms required to produce them, consumers would have a fair choice, and bamboo would have a fair chance.  Consumers should not be deprived of bamboo products due to the environmental costs of production any more than they should be deprived of other products with those same environmental costs.

The same analysis applies to domestic products.  Wood products made from domestic natural resources are major competitors for bamboo.  Disregarding, arguendo, the additional negative environmental effects of logging operations, retail products made from local trees could involve even more environmental impacts than importing bamboo for competing uses.  To illustrate, products made from local redwood trees could involve transporting the raw materials across several state or even international borders before being milled into usable lumber.  The comparable advantage of China’s labor market may then compel shipment of that lumber across the Pacific Ocean and back before a redwood-trimmed clock eventually appears on a retail shelf at Walmart.  Should Walmart or any other business choose to offer products that internalize the environmental costs of production:  awesome.  Environmentally-conscious consumers who can afford it can buy them.  But until the price of all products include the environmental costs of production, our globalized economy will continue to disregard these costs when determining the comparative advantages of other countries and the market value of the products generally available to consumers.  The important fact is that, from a sustainability standpoint, bamboo is better—whether externalities of production are internalized or not.

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under: Business, Climate Change, International, Natural Resources
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