Monday, December 18, 2006

A Cascade of Consequences

A fascinating article on Chinese cashmere convincingly portrays U.S./China trade as a dance of death:

[B]ehind the inexpensive Made in China tag is something Americans rarely see: the cascade of consequences around the world when the full might of Chinese production and U.S. consumption converge on a scarce natural resource….

The country's enormous herds of cashmere-producing goats have slashed the price of sweaters. But they also have helped graze Chinese grasslands down to a moonscape, unleashing some of the worst dust storms on record. This in turn fuels a plume of pollution heavy enough to reach the skies over North America.
Goats aren’t the only thing turning China into a moonscape, as I discussed in this post on the facai trade. The cashmere boom stems from increased availability at lower prices, while the facai trade is based on limited availability at higher prices. Either way, though, the result is the same: desertification.
Shatar called his goats once more, and the animals trudged into view. Their wispy coats fluttered in the wind. They limped up a hill and slumped to the ground around him. They were starving.
In addition to a shortage of grass, there's a shortage of water; this is a region that gets six to twelve inches of rain per year. "And yet," as an anonymous Mancunian once said to Friedrich Engels, "there is a great deal of money made here."
With U.S. demand at an all-time high, companies continue to build new factories and buy more expensive equipment--putting themselves deeper in debt. That glut of production, in turn, pushes prices ever lower.
Behold the awesome power of market forces! And while you're at it, behold the awesome power of global air circulation:
"We had one storm in East Asia which we called the perfect dust storm," said Barry Huebert, an oceanographer at the University of Hawaii. "There are good images of it following over the Pacific as a yellow plume. When it got to Colorado, it reduced visibility enough to make the national news.
As gruesome as this story is, it’s gratifying to see such a thoughtful, thorough article in a major American paper. Plenty of journalists would feel they’d been sufficiently hard-hitting once they’d discussed the social ramifications of cashmere losing its snob appeal.

I'll come back to this issue in a moment, but first, let's look at a similar problem a bit closer to home.

To paraphrase William Blake, “If the fool would persist in his folly, he would become a proponent of mitigation banking.” I said farewell some time ago to the few illusions I had about this “market-based solution” to the destruction of wetlands. But for some strange reason, my loud-thundering disapproval seems not to have impressed anyone.

Perhaps people will listen to the St. Petersburg Times, which has an excellent special report on this appalling shell game. It's worth reading in full, but this anecdote will suffice for now:
On a broiling August morning, two would-be developers, D. Miller McCarthy and Alan Fickett, turned themselves in at the Polk County Jail. Deputies took their fingerprints and snapped their mug shots.

The state of Florida had charged the pair and their corporation with seven felonies and nine misdemeanors for allegedly building unauthorized roads that destroyed wetlands at the edge of the Green Swamp, the headwaters of most of the major rivers in Central Florida....But a judge ruled officers had bungled a search of the company's offices and excluded the evidence. Prosecutors dropped all charges.

McCarthy and Fickett reinvented themselves. They launched a company called Ecobank and became the kings of a fledgling industry called wetland mitigation banking, which makes it easier for developers to wipe out swamps and marshes.

Their biggest customer? You, the taxpayer.
What's the connection between Florida's woes and China's? Well...mitigation banking, basically:
[A] decision in Beijing in 1994 to require that all cropland used for construction be offset by land reclaimed elsewhere has helped create the ecological disaster that is now unfolding. In an article in Land Use Policy, Chinese geographers Hong Yang and Xiubein Li describe the environmental effects of this offset policy. The fast-growing coastal provinces, such as Guandong, Shandong, Xheijiang, and Jiangsu, which are losing cropland to urban expansion and industrial construction, are paying other provinces to plow new land to offset their losses. This provided an initial economic windfall for provinces in the northwest, such as Inner Mongolia (which led the way with a 22 percent cropland expansion), Gansu, Qinghai, Ningxia, and Xinjiang.
An initial economic windfall. This is the same blind urge that leads bees into soda bottles and rats into traps, and yet we're supposed to worship it as the perfection of thought, and call anyone who questions it a fool or worse.

If foreign investors want to build office blocks on our coastal wetlands, we can simply flood a small meadow upstate. If the Chinese need to destroy their farmland in order to build factories that manufacture magnetic ribbons for our SUVs, they can simply shift their agricultural sector to the high Mongolian desert. Problem solved, and with no net environmental least on paper.

Words fail me, really, so I'll wrap things up with this quote from Adam Smith:
[W]hat is it which prompts the generous, upon all occasions, and the mean upon many, to sacrifice their own interests to the greater interests of others?....It is reason, principle, conscience, the inhabitant of the breast, the man within, the great judge and arbiter of our conduct. It is he who, whenever we are about to act so as to affect the happiness of others, calls to us, with a voice capable of astonishing the most presumptuous of our passions, that we are but one of the multitude, in no respect better than any other in it; and that when we prefer ourselves so shamefully and so blindly to others, we become the proper objects of resentment, abhorrence, and execration.


Thers said...

Whenever I've bumped up against the concept of "rationality" in economics I've been baffled. In a heavily armed nation? Hah!

Phila said...

Whenever I've bumped up against the concept of "rationality" in economics I've been baffled. In a heavily armed nation? Hah!

It's a conundrum, alright. That's what drives me nuts about the audience/reception for stories like this one, too. It isn't about the environment; it's about business.