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  • Aaryan Doshi

Circular Economy, Environment and Globalization


New York Times columnist Thomas Friedman states, “Globalization is the integration of capital, technology, and information across national borders, in a way that is creating a single global market and, to some degree, a global village.”


That model has served us well for the longest time - as long as we do not view it through the lens of the environment. We dissected this in the Jacket series. Thanks to globalization, we are able to get cheaper goods. It has lifted many out of poverty in countries around the world. Sellers are able to discover new buyers in this global village. The advent of online shopping has simply accelerated this trend.


But then, when I think about the environment, I start to see some concerns. For example, in this global village, the buyer and the seller are far apart. This implies longer transportation cycles, which implies more CO2 emissions


Now, let’s turn to agriculture. If the buyer only wants certain types of crops, the seller will always want to produce those crops - faster and cheaper. That implies mono-cropping. That also implies not giving enough time for the soil to regenerate. Poor soil quality implies deforestation and less water retention.  Ultimately, the seller’s soil will have no crops to give!


But there is more. Applying the Supply, Demand, and Price principle, globalization has the propensity to cause more unchecked resource extraction as sellers rush to maximize profits while facing stiff competition. 


Our planet has paid a premium in terms of environmental damage to facilitate global trade.


But is localization the solution? Will it not raise prices? Will it result in poverty in nations dependent on global trade? Will it cause hardships in countries where citizens depend on other nations to buy goods? Any climate change solution that hurts economic prosperity is hard to justify.


I feel Circular Economy provides the happy middle ground. While it will require adjustment, it also presents a model that facilitates climate friendly globalization.


References:

Thomaslfriedma. (2016, August 12). The Lexus and the Olive Tree - Thomas L. Friedman. Thomas L. Friedman - Official Site for Thomas Friedman, NY Times Columnist and Pulitzer Prize Winning Author. https://www.thomaslfriedman.com/the-lexus-and-the-olive-tree/


Effects of Globalization on the Environment. (2021, April 15). Business Insights Blog. https://online.hbs.edu/blog/post/globalization-effects-on-environment


Supply and Demand: Why Markets Tick. (2019b, January 2). IMF. https://www.imf.org/en/Publications/fandd/issues/Series/Back-to-Basics/Supply-and-Demand

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