Thursday 17 November 2011

Trade and Naomi Klein

This week Naomi Klein issued her "climate agenda" as a response to the Tea Party deniers to climate change. The six "arenas" for change include one on international trade, in which production is "relocalized". A few thoughts on this:

Production and trade has always involved large distances, or least since man worked out animals could carry things and that ships with sails can go long distances. Economists show that trade brings about an efficient use of resources because of the theory of comparative advantage, whereby two countries trade with oneanother the things that they are respectively better at producing more of.

"Re-localizing" food production as Klein advocates would make food more expensive, which would be a bad thing for people on low incomes (who spend proportionally more of their budget on food than the rich). It would also be bad for the climate in some cases - certain foods are imported from warmer regions not just because it is cheaper to produce there but the emissions (even when you include transport) can be considerably lower, for example for fruits imported in the winter.

Freakonomics sums it up nicely today with this post.

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