global tradeAlthough globalization can help create additional value and increased efficiencies for national economies, it has an obvious negative impact in terms of the ecological costs of transportation. However, global trade’s more severe but less-understood threat to sustainability is its incompatibility with the carrying capacities of our natural ecosystems.

by Asheen Phansey, President of Quaking Aspen, LLC and Adjunct Professor, Babson College.  Read Asheen’s BlogFollow Asheen on Twitter.  Asheen is presenting “Working With Biomimicry as an Innovation Framework” at the Sustainable Brands’10 Conference.

Modern economics says that global trading can often create additional value for all involved. A country’s economy will function more efficiently if it produces an excess of goods that are easier for it to make and trades these for other goods; that’s a basic extension of the concept of division of labor. The obvious negative impacts of global trading are transportation costs, both financial and ecological; but if we can develop cleaner modes of transportation, surely the positive economic effects outweigh the ecological costs?

I had thought as much, until Professor Ben Linder of Olin College of Engineering made me rethink my assumptions. In a sustainability workshop that I’ll be chewing on for a while, Ben said that global trade’s real threat to sustainability has to do not with transportation costs, but with carrying capacities.

First, a brief ecology lesson. Picture a world of three tribes: the Sumerians, Babylonians and Phoenicians. For simplicity, these ancient people need only three things to survive: stones (for building houses), barley, and fruit, say one unit per person. Each tribe practices an internal division of labor and produces some of each resource.

Each tribe’s skills and geography are differently suited for producing each resource, but all three resources are equally necessary for survival, so for each tribe only one resource is the limiting factor to growth. Let’s say in our case, Sumer is always scrounging for stones; the Babylonians are often bereft of barley; and fruits are few and far between in Phoenicia. If each tribe can make 1000 units of its scarce resource, but can make 2500 of the other two, each can still only support 1000 people; so the world population is 3000.

Now the tribes discover trade. Each tribe barters some of its two excess resources to the one deficient in each, so now the resources are distributed evenly at 2000 each of stones, barley, and fruit. Now, each tribe can support 2000 people. Without producing any new resources, the population of the world has doubled! And with further specialization, production will likely increase as well. Clearly, the more tribes you can trade with, the fewer your resource limitations to growth.

So why is in-tribe division of labor a good thing, but cross-country trading detrimental to the planet? Because ecosystems can’t trade natural resources. A tribe’s ecosystem is resilient as long as its resources don’t flow out, but the earth can’t ship fertile soil to Phoenicia in exchange for some cleaner water elsewhere if Phoenicia depletes all of its crop nutrients. Yet that’s surely what will happen if the whole world demands Phoenician fruits from land that wasn’t evolved to support the needs of the trade-burgeoned domestic population, let alone the entire world.

This was happening long before the world “flattened”. Ben is fond of telling the story of the collapse of the Atlantic cod population, a resource that put Boston on the world map. Over the last few centuries, “tribes” from around the world traded their resources for Atlantic cod and literally fished it out of George’s Bank. There are cod species elsewhere, but since George’s Bank can’t exactly trade for this top-tier predator, its entire food web is now going through an unstable flux known as a trophic cascade in the cod’s absence. (Read the fascinating history of George’s Bank.)

There are other ways that global operations can stymie sustainability, such as introducing lags into the feedback loops for optimal production, but this argument of carrying capacities seems to be the main challenge. I’d love to hear your thoughts on it, though.

Photo Courtesy of Rafael Ortman

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Author: aphansey (1 Articles)

Asheen has dedicated his career to the innovative materials, processes and business models required to achieve sustainable industrial growth He spent the early part of his career in R&D and management roles in the high technology sector. Drawing on this background, Asheen has developed further expertise in sustainable innovation. He was certified in 2007 as a Biologist at the Design Table by the Biomimicry Institute and has traveled the country lecturing on Nature-inspired business models. Asheen is on the faculty of Babson College as an Adjunct Professor in the Entrepreneurship division. He teaches a unique MBA offering called Sustainable Entrepreneurship Inspired by Nature, the first MBA course in the country that will teach entrepreneurial innovation based on Nature’s principles.

  • Elmo

    In what way can this be considered a serious (intelligent) article? Is trade to stop completely? There are issues with trade to be sure, but get serious about resolving the problems. Looking the other way does not made problems go away.