Pandemic highlights the unsustainable nature of our globalized economy

What lessons has the COVID-19 pandemic taught us?  On the smallest level, washing our hands and maintaining good hygiene are now in the front of our minds.  I’m sure many of us are now more grateful for the lifestyles we were able to live before this calamity happened and we have had to isolate.  Lessons can also be drawn from how our country and society as a whole have reacted to and handled the pandemic. 

COVID-19 has taken the world by storm and disrupted daily life. What has it taught us about how we operate? (Karabell)

Across the world, national, provincial, and local economies have struggled. Strife is apparent in governments where partisan divisions keep decision-makers from coming together for the common good.  It has shown us that coming together and compromising is the only way to find solutions to problems.  

Perhaps the biggest lesson that this pandemic has taught us is that the present globalized economic system is unsustainable.

About The globalized System

The current system of international trade was established during the 1990’s with the purpose of tearing down the trade barriers built up during the Cold War and expanding economic activity to countries everywhere.  Starting with the establishment of free trade deals and international trade institutions, such as the World Trade Organization in 1995, international trade became easier and more profitable (Klein).  Private companies began expanding their operations to foreign countries that provided strong incentives.  Such incentives include access to new markets for their products as well as lower labor costs and market prices.  

Also, countries have now begun to specialize in the production of certain products to build up a competitive advantage over other countries.  For example, products built here in the United States consist of separate parts manufactured in countries across the world.  For instance, a Boeing commercial jet or an iPhone are American products, but the parts needed for assembly come in from countries across Asia, Europe, and other regions.  There are many moving parts in making our products, all of which involve stability in the supply chain.  

A Globalized Economy Creates Many Problems

A number of issues have stemmed from this trade globalization process in regards to sustainability.  One of them is that pro-climate policies have been trumped on numerous occasions by international trade laws, keeping necessary climate-friendly practices from being fulfilled.  Naomi Klein in her book “This Changes Everything: Capitalism vs. Climate Change” dedicates the second chapter to this problem and provides several examples.  Ontario launched its Green Energy and Green Economy Act, which pledged to wean the province off of coal by 2014.  It was highly praised by the climate change community, but it contradicted WTO law.  The problem was that the plan included a minimum requirement for the companies on the percentage of the labor force and materials to be sourced in Ontario.  This is considered trade discrimination against foreign countries, and thus the WTO court system ruled against Ontario in a suit filed by Japan and the European Union (Klein).  

These kinds of rulings have had negative repercussions for the environment, particularly in regard to greenhouse gas emissions.  The food industry has proven to be an economic sector among the biggest contributors to greenhouse gas emissions.  Nowadays, for the most part, food is produced by diesel-guzzling tractors and sprinkler systems, then is packaged in plastic, and finally shipped via cargo ship or plane to supermarkets internationally.  Even that fails to mention the livestock sector of the industry, where thousands of cattle, for example, are crammed into massive cattle houses and fed loads of corn, grain, and other feeds (which takes lots of emissions to make).  These animals also produce a high quantity of greenhouse gases themselves by natural processes.  Having an international food system is incredibly costly to the environment with lots of emissions produced at each step of the process from the farm to the supermarket.

Globalized industry requires widespread shipping, producing massive amounts of emissions. (“World Shipping Council – Partners in Trade”)
COVID-19 Exposing the System

Today, the system in place is not operating well in managing the COVID-19 pandemic.  This outbreak could prove to be the big break needed for sustainability, for it is showing that private businesses operating in multiple different countries incur risk.  These businesses cannot operate as effectively during a pandemic as it spreads to the countries where its operations are sourced and disrupts the supply chain.  China is a country where many foreign firms have sourced their manufacturing operations, and it was the first country to report cases of COVID-19.  This has led to major production problems, such as the United States not having enough ventilators or insulin to keep up with the demand (Kliff et al.).  As Junice Yeo, a contributor to the media company Eco-Business, put it, “when China catches a cold, the whole world sneezes,” (Yeo).   

What Can Be Done?

An economically globalized society has numerous pitfalls.  Benefits would be reaped should the world start localizing their economic activity through supply chain realignment.  Moving the supply chain towards places located closer to or within the same country reduces the emissions necessary to transport the materials being produced.  Instead of sending materials and products across countries or even continents, keeping production as close as possible would greatly cut emissions.  Also, sourcing the supply chain in countries that have lower risk tied to them allows for firms to be better prepared for crises such as the COVID-19 pandemic.  Keeping employees and facilities closer to home makes it easier to manage operations when hard times fall upon the world.  While a total revamp of how the world operates is the ultimate goal, a small step in that direction would still go a long way.    

Steven Sciglibaglio is a senior International Relations and Economics double major with a minor in Environmental Studies at SUNY Geneseo.

Sources

Karabell, Zachary. “Will the Coronavirus Bring the End of Globalization? Don’t Count on It.” The Wall Street Journal, Dow Jones & Company, 20 Mar. 2020, www.wsj.com/articles/will-the-coronavirus-bring-the-end-of-globalization-dont-count-on-it-11584716305.

Klein, Naomi. This Changes Everything: Capitalism vs. the Climate. New York: Simon & Schuster Paperbacks, 2015.

Kliff, Sarah, et al. “There Aren’t Enough Ventilators to Cope With the Coronavirus.” The New York Times, The New York Times, 18 Mar. 2020, www.nytimes.com/2020/03/18/business/coronavirus-ventilator-shortage.html.

“World Shipping Council – Partners in Trade.” Carbon Emissions | World Shipping Council, www.worldshipping.org/industry-issues/environment/air-emissions/carbon-emissions.

Yeo, Junice. “Could the Coronavirus Outbreak Be Sustainability’s Big Break?” Eco-Business, February 19, 2020. https://www.eco-business.com/opinion/could-the-coronavirus-outbreak-be-sustainabilitys-big-break/

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