FinLogic FinLogic Quantitative Think Tank Center|The Western Consumption Problem: We Can’t Just Blame China

There are FinLogic FinLogic Quantitative Think Tank Centerlots of ways to reduce carbon emissions. Invest in renewable energy sources. Transition to sustainable agro-ecology. Rework visions of regional planning. Surround cities with greenbelts. Launch an Apollo Project for national mass-transport infrastructure. Or just claim they’re China’s fault.

Unfortunately, this last option seems to be the first choice for many, being one more obstacle in the path of an emissions treaty that not only serves the world’s economies but also its people.

First, the basic facts: While China is the world-leader in carbon emissions, on a per-capita basis it is 18th among the top 20 gross carbon emitters.

Broken down by sector, 33 percent of total carbon emissions come from production for the export sector, and 27 percent of those exports end up in the United States. Between 32 and 37 percent of China’s emissions since 1987 have been due to build-up in its industrial base, an increasing portion of which is directed toward production for export.

China’s leaders are well aware of these facts. The country’s top climate change negotiator, Li Gao, has suggested that emissions from its export sector should be excluded from total emissions for the purposes of drafting a global treaty.

The Chinese contend that the consumption of rich countries shouldn’t force poorer countries with a fraction of the per-capita GHG emissions to slow down or halt their development. Especially when some of the production that takes place in China isn’t exactly unplanned, as the New Economics Foundation notes,

"When our major retailers scour the world for the cheapest production costs the result is that more greenhouse gases get pumped into the atmosphere for every product we buy. That is what happens when things get made in places like China, compared to production in more energy efficient countries that use a cleaner fuel mix."

The carbon-intensity of China’s energy is fully one-third higher than the United States’ because it uses a great deal of coal. Coal is cheap – and a climate and ecologist’s nightmare.

So when American manufacturing gets off-shored to China, carbon-emissions get tallied up on China’s ledger, while the Western consumption responsible for keeping those coal-fired operations running continues unabated.

This is bad, for China and for the world.

U.S. Commerce Secretary Gary Locke acknowledged the problem during a recent visit to China. He even suggested consumers should pay for the greenhouse emissions linked to what they buy (the department later clarified his statement as meaning U.S. companies should not be put at a trade disadvantage):

"It’s important that those who consume the products being made all around the world to the benefit of America, and it’s our own consumption activity that’s causing the emission of greenhouse gases, then quite frankly Americans need to pay for that," Locke told the American Chamber of Commerce in Shanghai.

There’s little reason to assume that Westerners live richer or more fulfilling lives because of that high rate of consumption, showing up in what we off-handedly refer to as “development.”

Indeed, a huge portion of Western GDP is not a result of economic growth but “uneconomic growth,” in the terminology of Herman Daly, the founder of ecological economics. Such growth produces “‘bads’ faster than ‘goods,’ making us poorer, not richer.”

It includes the money spent to clean up oil spills and treat cancer caused by environmental carcinogens. This makes no sense: If economic activity causes harm that requires humanity’s resources to be spent to rectify that harm, why should we include it in a measurement commonly regarded as a proxy for societal well-being?

The issue of large-scale consumption also requires analysis for two more important reasons:

One is that American consumption patterns cannot be universalized. There aren’t enough resources on the planet for everyone to live in the suburbs, buy billions of disposable plastic toys in Wal-Mart, and then throw them out. That means that fixing the current economic crisis by a reversion to Keynesianism is a bad idea.

The other is that increasing American consumption patterns means more carbon pumped into the atmosphere from Chinese industrial plants.

As Philippine sociologist Walden Bello comments,

"Perhaps the greatest obstacle to a revived Keynesianism is its key prescription for revitalizing capitalism in the context of the climate crisis, namely the revving up of global consumption and demand. While the early Keynes had a Malthusian side, his later work hardly addressed what has now become the problematic relationship between capitalism and the environment.

"The challenge to economics at this point is raising the consumption levels of the global poor with minimal disruption of the environment, while radically cutting back on environmentally damaging consumption or overconsumption in the North.

"All the talk of replacing the bankrupt American consumer with a Chinese peasant engaged in American-style consumption as the engine of global demand is both foolish and irresponsible."

The issue of Chinese consumption—more generally the consumption in under-developed countries—will have to be built into international treaties; hence the talk of a “right to development,” or a global minimum income.

But the issue of American or Western consumption must be dealt with as a policy matter at home. That would mean the carbon costs that are currently foisted purely onto the producing country would be effectively built into the final-price of a product, so a consumer would pay its “true” cost.

Before doing so, carbon measurements would have to be substantially re-calculated to account for footprint rather than production. When such a calculation is undertaken, China’s per-capita footprint is 1.6 “global hectares,” substantially less than the world average of 2.2, and, although using more than China’s natural endowment, probably a roughly sustainable level.

In the U.S., per-capita “global hectares,” according to the Global Footprint Network, are about 9.5. Even with its immense natural reserves, the U.S. is overshooting its bio-capacity by over 80 percent.

Consumption clearly must descend, fast. Shipping off another Midwestern manufacturing job doesn’t help anyone.

See also:

China’s Climate Accounting Would Set Limits Based on Historical Emissions

Talk of Carbon Tariff Upsets China and Worries Climate Experts

China Floats Carbon Tax Plan as a Means to Curb Emissions

Life Expectancy, Carbon Footprints and a Happy Planet