Mainstream economic science traditionally measures trade flows in terms of money, i.e. exchange values on the market. To overcome the limits of this concept several approaches within ecological economics have been analyzing statistics on trade in order to quantify how commodity flows can be measured in terms of physical parameters such as materials and energy. The method of Material Flow Analysis thus converts trade statistics into measures of weight (Fischer-Kowalski, 1998). This is useful for estimating, for instance, a country’s Physical Trade Balance, i.e. whether a nation is gaining or losing physical resources in international trade (Pérez Rincón, 2006).
Another approach to the metabolic significance of trade is to measure the physical inputs that have been invested in the production of a traded commodity. This is often referred to as ‘embodied resources’, for instance, the quantities of embodied energy, land, water, or labor that have been expended in the production process. Such measures do not tell us which resources actually pass a nation’s borders, but they can tell us much about the impacts of different production processes in different countries. By outsourcing the production of commodities which require large amounts of embodied land or water, for instance, a nation can displace its environmental loads to other countries. This also applies to various kinds of detrimental environmental impacts such as indirect material requirements, greenhouse gas emissions, and biodiversity loss (Weisz, 2007; Muradian & Giljum, 2007). The concept of ecological rucksack is sometimes used for environmental impacts of a commodity that can only be estimated through a Life Cycle Analysis of its production.
Another widely used concept is the ecological footprint of a given pattern of consumption per capita (Wackernagel & Rees 1996). This method is founded on the observation that most kinds of resource use ultimately represent a demand on eco-productive land, measured in average hectares. Although there are methodological difficulties with aggregating very different kinds of resource use, the method has yielded instructive visualizations of how unequal claims on land surfaces by populations of different countries are, depending on average per capita income and consumption habits. Inspired by this concept, similar measures such as water footprint and carbon footprint have been used. An influential measure of embodied resource inputs is the concept of ‘Emergy’, shorthand for Energy Memory, which denotes the amount of energy that has been expended in production (Odum 1996). It can also be argued that the traditional Marxian focus on the amount of labour time that has been embodied in a commodity should be included in the analysis of physical aspects of the economy as done in the concept of ecological unequal exchange.
Whether the focus is on materials, energy, labor, land, water, carbon, or environmental degradation, it is obvious that economists concerned with sustainability and environmental justice ought to consider physical aspects of trade, rather than just flows of monetary value. Such considerations should lead to quite different assessments of efficiency, if the inputs and outputs are conceived in other than monetary measures. It is now possible to estimate significant physical impacts of production and thus also the environmental consequences of consumption, including the extent to which they have been externalized beyond a nation’s borders (Jorgenson 2003).
References
Fischer-Kowalski, M. (1998) Society’s metabolism: The intellectual history of material flow analysis, part I: 1860-1970. Journal of Industrial Ecology, 2(1), 61-78.
Jorgenson, A. (2003) Consumption and environmental degradation: A cross-national analysis of the ecological footprint. Social Problems, 50(3), 374-394.
Muradian, R., Giljum S. (2007) Physical trade flows of pollution-intensive products: Historical trends in Europe and the world. In Hornborg, A., McNeill J.R., Martinez-Alier, J. (eds.) Rethinking Environmental History: World-system History and Global Environmental Change, Lanham: AltaMira Press, 307-325.
Odum, H.T. (1996) Environmental Accounting: Emergy and Environmental Policy Making, New York: John Wiley & Sons.
Pérez Rincón, M. (2006) Colombian international trade from a physical perspective: Towards an ecological ‘Prebisch Thesis’. Ecological Economics, 59(4), 519-529.
Wackernagel, M., Rees, W.E. (1996) Our Ecological Footprint: Reducing Human Impact on the Earth, Gabriola Island: New Society Publishers.
Weisz, H. 2007. Combining social metabolism and input-output analyses to account for ecologically unequal trade. In: Hornborg, A., McNeill J.R., Martinez-Alier, J. (eds.) Rethinking Environmental History: World-system History and Global Environmental Change, Lanham: AltaMira Press, 289-306.
This glossary entry is based on a contribution by Alf Hornborg
EJOLT glossary editors: Hali Healy, Sylvia Lorek and Beatriz Rodríguez-Labajos
