Climate Gains in the West, Exported Pollution in the Rest

By: Dan_Steinbock

Recently, President Duterte slammed Canada for sending waste to the Philippines. Yet, the challenge is huge. Exported pollution from advanced economies penalizes the rest of the world and distorts climate gains.

President Duterte’s statement ensued after environmental groups’ renewed call for Canada to take back waste sent to the Philippines in the Aquino era, some six years ago.

According to the Pacific Center for Environmental Law and Litigation (PCELL), Ontario-based Chronic Inc. shipped 40-foot containers to the country in 2013, which is considered “illegal traffic” under Article 9 of the Basel Convention. More than 100 shipping containers arrived in Philippine ports around 2013-14.

The toxic discovery, made on Mindanao, is the third time in recent years that the Philippines has served as a dumping ground for hazardous foreign trash. South Korea has been the culprit on two occasions. Along with the Philippines, both South Korea and Canada are signatories to the Convention.

In the 2017 ASEAN Summit, Canada’s PM Justin Trudeau pledged to Duterte that “Canada is working hard to resolve the issue.” Trudeau portrays himself as a committed proponent of carbon tax at home and of climate-change struggle internationally.

Yet, little progress has been achieved.

Exporting pollution  

Effective since 1992, the international Basel Convention was created to reduce the movements of hazardous waste between nations and to prevent transfer of hazardous waste to the Third World.

Yet, it failed to contain the fatal practices. As a result, China, in summer 2017, imposed a ban on more than 20 types of waste imports, including recyclable plastic. As it became effective in January 2018, the waste plastic commodity market took a hit and behind-the-façade dumping likely intensified elsewhere – as waste shippers sought to escape regulatory penalties at home.

In the early 1990s many advanced economies still refused to take responsibility for the waste in the “Third World” saying they had little or nothing to do with it. The statements relied on research claiming that only 4% of hazardous wastes that came from OECD countries were shipped across international borders.

In reality, recent studies of carbon trade indicate that 25% or more of the world’s total emissions have been offshored into less-wealthy economies. Here’s the bottom line of the “pollution haven hypothesis”: When major advanced economies set up factories or offices abroad, they often look for the cheapest option in terms of resources, labor, land, and material access. Consequently, environmentally unsound practices expose vulnerable developing economies, which tend to have less stringent environmental regulations.

For instance, when Americans turn spent batteries to be recycled, they often end up in Mexico, where the lead is extracted by crude methods that are illegal in the U.S., due to tougher environmental standards on lead pollution. To avoid costly regulation at home, U.S. battery industry exports the lead to Mexico, which thus serves as America’s “pollution heaven.”

Today, there is increasing awareness of the detrimental impact of CO2 pollution on the world climate, yet countries vary widely in how they design and enforce environmental laws. That allows some multinational firms to look “environmentally friendly” in their advanced economies, even as they dump waste into less prosperous economies, which are then charged for pollution.

According to new research, firms headquartered in countries with strict environmental policies perform their polluting activities abroad; in countries with relatively weaker policies. Typically, these effects are stronger for firms in high-polluting industries and with poor corporate governance characteristics.

Although firms export pollution, they nevertheless emit less overall CO2 globally in response to strict environmental policies at home and use it as a “resource” for new green technologies – two birds with one stone, if you will.

Pollution gains in the West, by penalizing the rest

Here’s the dilemma: The U.S. and particularly the EU have made major strides in reducing greenhouse gas emissions at home. But when international trade is taken into account, advanced economies have effectively “outsourced” a big bulk of their carbon pollution overseas, by importing more steel, cement and other goods from factories in China, emerging Asia and elsewhere.

The UK, the first industrializer, cut its domestic emissions within its borders by one-third between 1990 and 2015. However, if these figures are re-assessed in terms of emissions from imported steel, the UK’s total carbon footprint has actually slightly increased. In the same period, progressive advanced countries, such as Japan and Germany, cut their own emissions, but doubled or tripled the carbon dioxide they offshored to China.

As long as no coordinated, long-term international effort is undertaken to address all contributing factors in climate change, key stakeholders, including multinationals, will find ways to partially circumvent strict environmental regulations in their wealthy home markets, while moving production capacity into relatively poorer emerging and developing economies.

When President Trump withdrew the United States from the Paris Climate Accord, had vital environmental regulatory practices dismantled and then began the push for “made in America” coal and steel (his trade hawks have deep ties with steel industry) and started oil exports for the first time in decades, he virtually ensured that environmental progress in the 20th century America will be undermined in the 21st century.

Yet, the problem is an old one. In 1992, Jim Puckett of Greenpeace, coined the term “toxic colonialism” for the dumping of industrial waste from the advanced West onto the territories of emerging and developing countries.

Environmental pollution has not disappeared from the advanced West; it has been exported to more vulnerable economies.

Dr Steinbock is the founder of the Difference Group and has served as the research director at the India, China, and America Institute (USA) and a visiting fellow at the Shanghai Institutes for International Studies (China) and the EU Center (Singapore). For more information, see http://www.differencegroup.net/

© 2019 Copyright Dan Steinbock - All Rights Reserved

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