Globalisation has been a key driver of growth and affluence around the world. It has allowed industrialized countries to rely on their exports to boost their potential for growth. It has also helped developing nations diversify their economies and fight poverty. In China alone, nearly 800 million people have been lifted out of extreme poverty since the 1980s.
Yet globalisation has produced both winners and losers and their uneven distribution is causing much global anxiety now. A chief criticism of globalization is that in its current form, despite its overall welfare-generating nature, it has worsened inequality within and among countries. Around the world, educated and highly skilled workers have enjoyed outsize growth in income and wealth, both of which are increasingly concentrated in the top percentile of earners.
In recent years, demand for unskilled workers in industrialized economies has steadily declined because of skill-biased technological change, the offshoring of labor-intensive jobs, and the substitution of local production with cheaper imports from emerging markets. This trend has depressed wages for low- and middle-income earners in advanced economies, especially since the 2008 global financial crisis. As a result, while the general welfare benefits have been immeasurable, distant, and diffused, the costs of globalization have been concentrated in specific communities, industries, or geographies that have suffered from dislocations.
Globalisation was also supposed to increase trade volume and bring economic prosperity for everyone (thorugh interdependence and connected supply chains) but ironically, increased consumption and demand for goods (especially cheaply made goods) has led to exploitation and more recently, massive disruptions to our supposed connectedness.
Is economic globalisation still working for us?
RV department lecture - introduction to economic globalisation
Examples (US, China)
Duration: 11:48
1) What is implied about the impact of globalisation in the first paragraph?
2) Why were people already warily labelling globalisation as 'slowbalisation'? (from the section I'm Coming Out')
3) Globalisation hinges on dependency (in the form of supply chains - what are the negative consequences of this dependency? (from the section I'm Coming Out')
Supply chains are the fibres out of which the past decades’ globalisation is woven. Time and again they have allowed intrepid outward-looking manufacturers to undercut their stay-at-home competitors and component-makers to find roles in new markets.
Networks of aircraft, email and container ships, not to mention railways and pipelines, have tied together businesses in Guangdong and Oregon, Durban and Dubai, Rennes and Punta Arenas. Masters of their use, such as Airbus or Apple, can create technological marvels from components provided in dozens of different countries using raw materials brought in from yet farther afield.
Over the past five years the tensions pulling at this fabric have been growing stronger. First came America’s tariffs on Chinese exports. Then the Covid-19 pandemic boosted demand for a particular constellation of goods while constraining their production and transport. Most recently Russia’s war in Ukraine sent commodity prices soaring and reminded firms how quickly a political shock can close one market and wreak havoc in others.
Governments and companies have a history of wringing their hands over such things but not, in the end, doing much to change them. This time things are different. As James Zhan of the United Nations Conference on Trade and Development wrote in a recent article, “The decade to 2030 is likely to prove a period of transformation for global value chains.” That transformation is already under way.
The direction of change is clearly visible in data on inventories, investment and hiring; its effects are in the news around the world. Apple’s shift of some production from China to Vietnam has whipped up a war for talent in the country. Chinese firms have filled up a giant industrial park in Monterrey, Mexico, in hope of meeting American customers’ demand from closer to home. In May alone, Samsung, Stellantis and Hyundai announced $8bn of investment in American electric-car factories.
Decision-makers are increasingly concerned that supply chains should be robust, not just efficient. As a result they are choosing to depend less on jurisdictions where they are exposed to risk. And countries are experimenting with industrial policies aimed at self-reliance or international pre-eminence in at least some “strategic” technologies and businesses. This means supporting investment in such sectors within their borders and sometimes restricting the export of the fruits of those sectors. Companies, for their part, are buying up suppliers at home and abroad in the name of vertical integration.
The market-based and Sino-centric system that started to emerge towards the end of the past century is being transformed into something which, though still global, is less unitary and more costly. This should ultimately turn out to be less fragile. But the transition will be messy enough to create shocks of its own.
“There are centrifugal and centripetal forces that pull the world together or apart,” notes Douglas Irwin, a trade historian at Dartmouth College. Today’s shift is not a swing from one extreme to the other; it is a strengthening of the centrifugal coupled with a weakening of the centripetal, which had, until recently, been at an historic high.
Beginning in the 1990s, technology, geopolitical stability and the search for efficiency and comparative advantage were powerful pullers-together. Unshackled from geography by better communications and more efficient containerised shipping, companies skipped from continent to continent in search of cheap inputs and thicker profit margins.
Global flows of foreign direct investment (fdi) had been worth 0.5% of global gdp in the 1970s and 1980s. By the mid-2000s they were worth 5% or more. This, in turn, created a global marketplace. In the two decades to 2008, trade as a share of global gdp jumped from 37% to 61%.
I’m coming out
Even before the covid-19 pandemic there were ample signs that globalisation had become slowbalisation. The share of American firms’ revenues that came from abroad was mostly flat; profits earned abroad were falling. Flows of trade and fdi had stagnated. One reason was automation, which reduced the labour intensity of manufacturing and therefore the competitive advantage of lower-wage countries that had become offshoring hubs in the 1990s and 2000s. Another was that wages in those countries rose.
In 2000 China’s average annual income per person expressed in dollars, a reasonable proxy for the wage costs facing a multinational firm, was 3% of America’s. That is one reason why the country’s accession to the World Trade Organisation the following year was so transformative. By 2019 that had risen to 16%.
The fragility of the system had become more obvious, too. The Tohoku earthquake of 2011 shut down Japanese car suppliers and dented silicon-wafer production. Flooding in Thailand later that year submerged a hub of hard-drive manufacturing. But worries about such risks failed to prompt much action.
A recent paper by researchers at the World Bank concluded that the disasters in Japan “did not lead to reshoring, nearshoring, or diversification”. The trade war with China which President Donald Trump started in 2018 saw corporate executives talk excitedly about supply-chain reshuffling. Yet there was little evidence for such a trend. In 2019 China still controlled more than one-quarter of the suppliers for big industries, including chemicals, electronics and textiles, according to the Conference Board, a research group.
The covid-19 pandemic proved a dislocation large enough for concern to beget consequences. In its early days governments scrambled, often unsuccessfully, to secure protective clothing and hospital ventilators. Changes in patterns of consumption away from in-person services and towards manufactured goods brought new bottlenecks into being. More recently China’s vainglorious attempt to maintain zero covid, punctuated by on-and-off lockdowns, has led to further disruption. Hundreds of ships were left dawdling pointlessly off Shanghai—an image of dysfunction now stuck in people’s minds.
The effects of Russia’s invasion of Ukraine have provided further, more profound shocks. It has disrupted markets in energy and, crucially, food in ways which highlight the need for more broadly based supplies. It has also made manifest the geopolitical risks of dependence on an autocracy with aggressive ambitions. That has further intensified concerns about China.
Thus economic dependency has become a cause for action, not just concern. This is most obvious in energy markets. Europe is working desperately to build up its gas inventories as well as its capacity to import liquefied natural gas (lng). In May NextDecade, an American energy company, announced a 15-year deal to sell lng to France’s Engie which will catalyse investment in a sprawling new export terminal along the Louisiana coast. Some senior Democrats are murmuring about easing their opposition to the Keystone xl pipeline from Canada. New infrastructure and long-term contracts are pushing a global, fluid system in the direction of one less efficient but more secure.
Dependency worries are also seen in manufacturing. The range of goods that governments deem critical has expanded well beyond the realms of defence and post-pandemic public health. “We cannot allow countries to use their market position in key raw materials, technologies, or products to have the power to disrupt our economy or exercise unwanted geopolitical leverage,” Janet Yellen, America’s treasury secretary, said in April. American export restrictions now include biotechnology software and the wherewithal for producing advanced semiconductors.
Industrial policy is increasingly de rigueur. More than 100 countries accounting for over 90% of the world’s gdp now have formal industrial strategies, according to a survey by the un, with a particular frenzy of activity in recent years. Policies run the gamut from investments in basic research to those that shield “strategic” industries from foreign competition.
Many are informed by a growing appreciation of the size and scope of the industrial shift implicit in plans for net-zero emissions. The European Commission is dangling subsidies in front of makers of batteries and semiconductors. In America, where President Joe Biden began his term with a “Buy American” executive order, subsidies to help industry compete with China have attracted bipartisan support.
Reach out and touch
There is little evidence of rich countries “reshoring” production from abroad. In America imports form an ever-larger share of domestic manufacturing output—a sign that manufacturers are becoming more reliant on foreign suppliers, not less. American spending on factories, warehouses and the like, relative to gdp, is only a tiny bit higher than it was in the early 2010s, and far lower than it was in the 1970s and 1980s. Across the OECD club of mostly rich countries manufacturing’s share of gdp is around 13%, an all-time low.
But although reshoring is minimal, what happens off which shores is changing, as companies come to their own conclusions as to whether the risk of trying a new model exceeds the risk of sticking with the old. One fairly simple approach is to sign contracts with additional suppliers. Fully 81% of supply-chain leaders surveyed by McKinsey this year are now sourcing raw materials from two suppliers, rather than depending on merely one. Evidence from Goldman Sachs, a bank, suggests that America is broadening the number of countries on which it relies for supplies, a trend that is mirrored in other rich countries. This does not in itself deliver robustness—if capacity does not increase, then a shock will still cut supply in the aggregate. But big capital-expenditure plans suggest that companies are trying hard to forestall such an eventuality.
Companies are also building up inventories—half-finished or finished products, left in reserve, which can be sold if demand suddenly ramps up or if fresh supply fails. This has big costs in terms of tying up money. The world’s 3,000 biggest companies have increased their holding by the equivalent of 1% of global gdp since 2019, according to The Economist’s analysis—and they want to do more.
The fact that industries are bearing those costs shows that they fear supply problems more than they used to. They may be paying for time to weigh their options and see how others respond before taking hard-to-reverse decisions such as moving plant or people. Some may think that larger inventories are a necessary response to supply-chain risks in perpetuity.
One family of hard-to-reverse decisions are those involved in vertical integration—either building the capacity to be your own supplier or buying up companies that already have that capacity. In some sectors this is a growing trend, driven both by supply-chain concerns and a desire to snatch back profit margins from suppliers.
The American computer sector is about 50% more vertically integrated than in the mid-2000s, as measured by the share of the industry’s gross revenues accruing to companies in that industry (rather than outside suppliers). Vertical integration in the American car sector, meanwhile, jumped around 2019. Chinese firms have a dominant position in both the production of batteries and the processing of minerals required for them. So multinational carmakers elsewhere are building their own battery plants and even investing in mines.
Wariness of China is prompting broader changes, too. Official statistics regarding fdi into China show it going from strength to strength, but these numbers are hard to reconcile with other sources. Another measure is “greenfield” fdi—the sort of capital injection that builds new offices or factories. Since 2019 China has commanded less than 10% of global greenfield-fdi inflows, down from a peak of close to 20% in the mid-2000s.
The number of oecd countries whose equity fdi into China was smaller than their disinvestment from it was zero in 2005. According to analysis by The Economist, that number had reached eight, or a fifth of the club, by 2019.
Employment tells a similar story. The share of American multinationals’ staff based in China is drifting downwards. At the same time those companies are boosting recruitment in other parts of Asia. They employ nearly 400,000 people in the Philippines, a 10% rise since 2016. Nearly 1.4m people in India work for American companies, a 14% rise from 2016.
Ain’t no mountain high enough
Other parts of Asia are the main beneficiaries of the not-China shift. In 2015 the total value of big democracies’ fdi in China exceeded their comparable investment elsewhere in East Asia by 20%. Now those positions are reversed. In 2021 oecd countries imported roughly $700bn-worth of Chinese-made “intermediate” goods (raw materials, components and the like), representing a modest increase from 2018. But imports of the same type of goods from Vietnam grew by 70% over the period.
There is plenty of increased investment elsewhere, too. The largest greenfield fdi projects announced in the past year have been Intel’s $19bn chip factory in Magdeburg, Germany, and Samsung’s $17bn chip factory in Taylor, Texas. On an annual basis Taiwan is injecting more than twice as much fdi equity into oecd countries as it did in the early 2010s.
Inward fdi figures for Mexico—a country forever talked up by apostles of nearshoring—remain unremarkable, but leading indicators of change are discernible. Firms that help suppliers relocate production to Mexico are being inundated with requests from Chinese companies looking to set up shop, according to Patrick Van den Bossche of Kearney, a consultancy. In May a company called Zipfox, which helps American businesses search for suppliers in Mexico, saw the volume of new customers on its website increase by 20%.
Mexico’s appeal is largely down to the access to markets elsewhere in North America provided by the us-Mexico-Canada Agreement. Similar trade deals could make the restructuring of supply chains easier and cheaper. Unfortunately, America’s leaders show no interest in persuading voters this would be worth doing.
Redesigning supply chains takes time, and noticing an effect takes even longer. The boss of a giant American manufacturer which now produces 90% of its products in China says it plans to boost investment in American and European manufacturing dramatically over the next five years. That will still leave China producing about half its goods. But the shift is under way.
The considerable costs of taking more than efficiency into account will fall on taxpayers, companies and consumers. The benefits should in principle be felt widely, too. But they may not be readily apparent. The world economy could become less vulnerable to shocks at a time when climate change and geopolitical tensions are increasing their frequency and intensity. Improving resilience could be a case of running to stand still.
Indeed some of the underlying tensions may be exacerbated. Attempts to boost economic security can create shocks of their own. This year the spectre of new tariffs on imported solar panels brought American solar projects to a standstill.
Increased economic integration did not bring about the greater global harmony that some had hoped it would. It is difficult to imagine that fragmentation will do much better, and it is all too easy to imagine it making things worse. That could be one of the reasons why, for a long time, changes to the fundamental shape of globalisation were much talked about but not much pursued. Now they are actually happening, they are contributing significantly to the new anxiety.
Every day, millions of sailors, truck drivers, longshoremen, warehouse workers and delivery drivers keep mountains of goods moving into stores and homes to meet consumers’ increasing expectations of convenience. But this complex movement of goods underpinning the global economy is far more vulnerable than many imagined.
Duration: 54:00
1) From the 2nd paragraph, what big change in the process of globalisation are we witnessing?
2) From the 4th paragraph, what are the recent problems with globalisation?
3) From the 7th paragraph, how are some nations coping with the pressures of globalisation?
4) From the 9th paragraph, why is insularity not a good alternative to globalisation?
The Economist | June 16 2022
Three years ago The Economist used the term “slowbalisation” to describe the fragile state of international trade and commerce. After the go-go 1990s and 2000s the pace of economic integration stalled in the 2010s, as firms grappled with the aftershocks of a financial crisis, a populist revolt against open borders and President Donald Trump’s trade war. The flow of goods and capital stagnated. Many bosses postponed big decisions on investing abroad: just-in-time gave way to wait-and-see. No one knew if globalisation faced a blip or extinction.
Now the waiting is over, as the pandemic and war in Ukraine have triggered a once-in-a-generation reimagining of global capitalism in boardrooms and governments. Everywhere you look, supply chains are being transformed, from the $9trn in inventories, stockpiled as insurance against shortages and inflation, to the fight for workers as global firms shift from China into Vietnam. This new kind of globalisation is about security, not efficiency: it prioritises doing business with people you can rely on, in countries your government is friendly with. It could descend into protectionism, big government and worsening inflation. Alternatively, if firms and politicians show restraint, it could change the world economy for the better, keeping the benefits of openness while improving resilience.
After the Berlin Wall fell in 1989, the lodestar of globalisation was efficiency. Companies located production where costs were lowest, while investors deployed capital where returns were highest. Governments aspired to treat firms equally, regardless of their nationality, and to strike trade deals with democracies and autocracies alike. Over two decades this gave rise to dazzlingly sophisticated value chains that account for half of all trade: your car and phone contain components that are better travelled than Phileas Fogg. All this kept prices low for consumers and helped lift 1bn people out of extreme poverty as the emerging world, including China, industrialised.
But hyper-efficient globalisation also had problems. Volatile capital flows destabilised financial markets. Many blue-collar workers in rich countries lost out. Recently, two other worries have loomed large. First, some lean supply chains are not as good value as they appear: mostly they keep costs low, but when they break, the bill can be crippling. Today’s bottlenecks have reduced global gdp by at least 1%. Shareholders have been hit as well as consumers: as chip shortages have stalled car production, carmakers’ cashflows have dropped by 80% year on year. Tim Cook, the supply-chain guru who runs Apple, reckons such snafus could reduce sales by up to $8bn, or 10%, this quarter. Covid-19 was a shock, but wars, extreme weather or another virus could easily disrupt supply chains in the next decade.
The second problem is that the single-minded pursuit of cost advantage has led to a dependency on autocracies that abuse human rights and use trade as a means of coercion. Hopes that economic integration would lead to reform—what the Germans call “change through trade”—have been dashed: autocracies account for a third of world gdp. Vladimir Putin’s invasion of Ukraine has painfully exposed Europe’s reliance on Russian energy. This week McDonald’s in Moscow, which opened in 1990, restarted under local control. Big Macs are no longer on the menu. Meanwhile, President Xi Jinping’s ideological and unpredictable China has a trade footprint seven times as big as Russia’s—and the world relies on it for a variety of goods from active pharmaceutical ingredients to the processed lithium used in batteries.
One indication that companies are shifting from efficiency to resilience is the vast build-up in precautionary inventories: for the biggest 3,000 firms globally these have risen from 6% to 9% of world gdp since 2016. Many firms are adopting dual sourcing and longer-term contracts. The pattern of multinational investment has been inverted: 69% is from local subsidiaries reinvesting locally, rather than parent firms sending capital across borders. This echoes the 1930s, when global firms responded to nationalism by making subsidiaries abroad more self-sufficient.
The industries under most pressure are already reinventing their business models, encouraged by governments that from Europe to India are keen on “strategic autonomy”. The car industry is copying Elon Musk’s Tesla by moving towards vertical integration, in which you control everything from nickel mining to chip design. Taiwan’s electronics assemblers have cut their share of assets in China from 50% to 35% since 2017 as clients such as Apple demand diversification. In energy, the West is seeking long-term supply deals from allies rather than relying on spot markets dominated by rivals—one reason it has been cosying up to gas-rich Qatar. Renewables will also make energy markets more regional.
The danger is that a reasonable pursuit of security will morph into rampant protectionism, jobs schemes and hundreds of billions of dollars of industrial subsidies. The short-term effect of this would be more volatility and fragmentation that would push prices yet higher: witness President Joe Biden’s consideration of new tariffs on solar panels, which he paused this month in the face of shortages. The long-run inefficiency from indiscriminately replicating supply chains would be enormous. Were you to duplicate a quarter of all multinational activity, the extra annual operating and financial costs involved could exceed 2% of world gdp.
The trouble with safe spaces
That is why restraint is crucial. Governments and firms must remember that resilience comes from diversification, not concentration at home. The choke-points autocracies control amount to only about a tenth of global trade, based on their exports of goods in which they have a leading market share of over 10% and for which it is hard to find substitutes. The answer is to require firms to diversify their suppliers in these areas, and let the market adapt. Will today’s governments be up to the task? Myopia and insularity abound. But if you are a consumer of global goods and ideas—that is to say, a citizen of the world—you should hope globalisation’s next phase involves the maximum possible degree of openness. A new balance between efficiency and security is a reasonable goal. Living in a subsidised bunker is not.
Does economic globalisation help or hurt the world's poor?
RV department lecture
The advantages and disadvantages of free trade
UK perspective: how economic globalisation contributed to Brexit
Singapore perspective: how we manage the effects of economic globalisation
Duration: 14:00
BBC Documentary podcast: https://www.bbc.co.uk/sounds/play/p09k6pz2
Globalisation is about open trade, open doors and open borders. It is the way that Asia has grown its economy for the better part of the last half century. But the pandemic and tensions between the US and China have seen globalisation go into reverse - with many now saying it hasn’t benefited everyone.
One of the biggest beneficiaries of globalisation has been Singapore. But the city-state is now an increasingly lonely voice calling for economies to stay open. It is being forced to reinvent itself and find new ways to grow its trade dependent and global economy. What lessons does Singapore have for the rest of us? Join Karishma Vaswani as she explores that question and many others in a wide-ranging interview with Singapore’s Prime Minister, Lee Hsien Loong.
Duration: 27:17
Free trade and globalisation tend to provide overall benefits, and raise average incomes across the globe. The downside is that it isn't good for every individual in the system. In some countries, manufacturing jobs move to places where labour costs are lower. And some countries that receive the influx of jobs are not prepared to deal with it, from a regulatory standpoint.
Duration: 9:02
Clothes to Die For is an unflinching film about the Rana Plaza factory disaster in Bangladesh that unfolded on April 24th 2013. The film is told primarily from the perspective of the survivors as well as those directly and indirectly involved. It includes raw footage of the aftermath of the tragedy, including scenes that were not often shown in the media due to their upsetting and unsettling nature.
The film is not intended to place blame on any one person or organization, but rather presents, without bias, the tangled web of responsibility that exists in the global fashion supply chain that represents well over 1.5 trillion dollars in business per year. Most importantly, it is a deeply human story of hopes and dreams, greed and corruption that puts a face to the mostly anonymous business of making clothes.
Clothes to Die For has the potential to raise awareness of how apparel and other products are being made and consumed. It can also facilitate meaningful discussions about the Rana Plaza tragedy and provide a human rights and fair trade context to discussions about the global supply chain system.
Duration: 58:43
What is a global supply chain? What is global sourcing?
How is the supply chain connected in the apparel industry?
How many countries do you think are involved in making one garment? What are some examples?
What are some of the reasons that a brand or company might produce apparel overseas?
What are some of the reasons that a country might want to produce and export apparel?
What are some of the issues that may arise in producing apparel?
How do you think human rights issues like “fair trade,” “fair wages” and “labor rights” relate to supply chain?
How is “fast fashion” different from previous fashion production and distribution models?
Who do you think is responsible for ensuring proper human rights related to manufacturing and sourcing?
How do you think human rights issues related to apparel production are currently being combatted?
1) How do “supply and demand” and the quest for better margins and profits help and/or hurt a country like Bangladesh? What are the pros and cons?
2) What are the tensions that exist between cheap prices and fair wages?
3) Is it possible to keep supply chains honest?
In 2001, the lucrative chocolate industry, due to pressure from NGOs, committed itself to put an end to child labor in cacao plantations before 2006. But has that promise been kept? The Ivory Coast, the world’s largest cacao producer, made a real effort to eradicate this scourge on the country. They built schools and trained farmers. Television adverts even reminded populations that child labor is illegal. But further into isolated areas of the forest, at the end of near-impassable roads, Paul Moreira discovered child slaves, forced to work in plantations, their incomes often seized by traffickers. These child slaves are separated from their parents and sometimes resold onto other traffickers.
Duration: 55:46
What is exploitation? If you were writing a paragraph in an essay, how would you explain how globalisation leads to economic exploitation of people in poor countries?
Is it possible to argue that globalisation has impacted this community of people in a positive way?
Write down 5 (or more) things that come to mind when you hear someone mention ‘Apple’ or you see the brand name ‘Apple’. What is the brand usually associated with?
Despite its promises of workers' rights and ethical sourcing of minerals, an undercover BBC investigation shows widespread 'niceness' failures in the supply chains for toys such as the iPhone.
Panorama, "the world's longest running investigative TV show," has accused Apple of breaking its ethical promises. Yes, other vendors use similar supply chains, but it's Apple that crows about how clean its hands are. Not clean enough, argues the BBC report.
Duration: 52:05
From the perspective of the workers, what human rights violations have taken place?
Adopt the perspective of an NGO dedicated to labour welfare. What questions do you have for Apple?
How has economic globalisation negatively affected the environment?
Globalisation has had a huge impact on our way of life. It has increased communication, faster access to technology, and more innovation. It has ushered in a new age of economic prosperity, created massive development channels, and played an essential role in bringing people of different cultures together.
On the other hand, globalisation has given rise to several issues, the most prominent of which is the effects on the environment. Globalisation has been a major subject in environmental discussions, with environmentalists highlighting its far-reaching consequences. Due to globalisation and industrialisation, various chemicals have been put into the soil, water and air, resulting in a great deal of environmental damage and putting a large strain on our natural and finite resources. In many places, mountains are being chiseled away to create room for a passing tunnel or motorway. Huge swaths of desolate land have been infringed upon to make new structures.
Global warming and other environmental issues are becoming exceedingly urgent, and globalisation and the rise of global consumer goods trade are exacerbating the situation. Dealing with these difficulties frequently necessitates international negotiations and burden-sharing agreements, both of which have proven difficult to achieve. This challenge is shown by the difficulty of obtaining a sufficiently rigorous global climate accord because many countries do not want to jeopardise their present economic development models. In the section below, you will find a list of negative environmental impacts which can be attributed to economic globalisation.
Studies have shown that the global food system is responsible for up to one third of all human-caused greenhouse gas emissions, of which 30% comes from livestock and fisheries. Crop production releases greenhouse gases such as nitrous oxide through the use of fertilisers.
60% of the world’s agricultural area is dedicated to cattle ranching, although it only makes up 24% of global meat consumption.
Agriculture not only covers a vast amount of land, but it also consumes a vast amount of freshwater, another one of the biggest environmental problems on this list. While arable lands and grazing pastures cover one-third of Earth’s land surfaces, they consume three-quarters of the world’s limited freshwater resources.
Scientists and environmentalists have continuously warned that we need to rethink our current food system; switching to a more plant-based diet would dramatically reduce the carbon footprint of the conventional agriculture industry.
One of the biggest environmental problems today is outdoor air pollution. Research from the World Health Organization (WHO) shows that an estimated 4.2 to 7 million people die from air pollution worldwide every year and that nine out of 10 people breathe air that contains high levels of pollutants. In Africa, 258,000 people died as a result of outdoor air pollution in 2017, up from 164,000 in 1990, according to UNICEF. Causes of air pollution mostly comes from industrial sources and motor vehicles, as well as emissions from burning biomass and poor air quality due to dust storms.
In Europe, a recent report from the EU’s environment agency showed that air pollution contributed to 400 000 annual deaths in the EU in 2012 (the last year for which data was available).
In the wake of the COVID-19 pandemic, attention has been put on the role that air pollution gases has in transporting the virus molecules. Preliminary studies have identified a positive correlation between COVID-19-related mortalities and air pollution and there is also a plausible association of airborne particles assisting the viral spread. This could have contributed to the high death toll in China, where air quality is notoriously poor, although more definitive studies must be conducted before such a conclusion can be drawn.
The past 50 years have seen a rapid growth of human consumption, population, global trade and urbanisation, resulting in humanity using more of the Earth’s resources than it can replenish naturally.
A recent WWF report found that the population sizes of mammals, fish, birds, reptiles and amphibians have experienced a decline of an average of 68% between 1970 and 2016. The report attributes this biodiversity loss to a variety of factors, but mainly land-use change, particularly the conversion of habitats, like forests, grasslands and mangroves, into agricultural systems. Animals such as pangolins, sharks and seahorses are significantly affected by the illegal wildlife trade, and pangolins are critically endangered because of it.
More broadly, a recent analysis has found that the sixth mass extinction of wildlife on Earth is accelerating. More than 500 species of land animals are on the brink of extinction and are likely to be lost within 20 years; the same number were lost over the whole of the last century. The scientists say that without the human destruction of nature, this rate of loss would have taken thousands of years.
Every hour, forests the size of 300 football fields are cut down. By the year 2030, the planet might have only 10% of its forests; if deforestation isn’t stopped, they could all be gone in less than 100 years.
Agriculture is the leading cause of deforestation, another one of the biggest environmental problems appearing on this list. Land is cleared to raise livestock or to plant other crops that are sold, such as sugar cane and palm oil. Besides for carbon sequestration, forests help to prevent soil erosion, because the tree roots bind the soil and prevent it from washing away, which also prevents landslides.
The three countries experiencing the highest levels of deforestation are Brazil, the Democratic Republic of Congo and Indonesia, however Indonesia is tackling deforestation, now seeing the lowest rates since the beginning of the century.
Rising temperatures and unsustainable farming practices has resulted in the increasing threat of water and food insecurity and taking the mantle as one of the biggest environmental problems today.
Globally, more than 68 billion tonnes of top-soil is eroded every year at a rate 100 times faster than it can naturally be replenished. Laden with biocides and fertiliser, the soil ends up in waterways where it contaminates drinking water and protected areas downstream.
Furthermore, exposed and lifeless soil is more vulnerable to wind and water erosion due to lack of root and mycelium systems that hold it together. A key contributor to soil erosion is over-tilling: although it increases productivity in the short-term by mixing in surface nutrients (e.g. fertiliser), tilling is physically destructive to the soil’s structure and in the long-term leads to soil compaction, loss of fertility and surface crust formation that worsens topsoil erosion.
With the global population expected to reach 9 billion people by mid-century, the Food and Agriculture Organization of the United Nations (FAO) projects that global food demand may increase by 70% by 2050. Around the world, more than 820 million people do not get enough to eat.
The UN secretary-general António Guterres says, “Unless immediate action is taken, it is increasingly clear that there is an impending global food security emergency that could have long term impacts on hundreds of millions of adults and children.” He urged for countries to rethink their food systems and encouraged more sustainable farming practices.
In terms of water security, only 3% of the world’s water is fresh water, and two-thirds of that is tucked away in frozen glaciers or otherwise unavailable for our use.
As a result, some 1.1 billion people worldwide lack access to water, and a total of 2.7 billion find water scarce for at least one month of the year. By 2025, two-thirds of the world’s population may face water shortages.
As of June 2022, CO2 PPM (parts per million) is at 418 and the global temperature rise is 1.1 degrees Celsius compared to pre-industrial levels. This can be traced to staggering increases in global economic activity.
The last time carbon dioxide levels on our planet were as high as today was more than 4 million years ago. Increased emissions of greenhouse gases have led to a rapid and steady increase in global temperatures, which in turn is causing catastrophic events all over the world – from Australia and the US experiencing some of the most devastating bushfire seasons ever recorded, locusts swarming across parts of Africa, the Middle East and Asia, decimating crops, and a heatwave in Antarctica that saw temperatures rise above 20 degrees for the first time. Scientists are constantly warning that the planet has crossed a series of tipping points that could have catastrophic consequences, such as advancing permafrost melt in Arctic regions, the Greenland ice sheet melting at an unprecedented rate, accelerating sixth mass extinction, and increasing deforestation in the Amazon rainforest, just to name a few. The climate crisis is causing tropical storms and other weather events such as hurricanes, heatwaves and flooding to be more intense and frequent than seen before. However, even if all greenhouse gas emissions were halted immediately, global temperatures would continue to rise in the coming years. That is why it is absolutely imperative that we start now to drastically reduce greenhouse gas emissions, invest in renewable energy sources, and phase our fossil fuels as fast as possible.
The climate crisis (fulled by ongoing global economic activity) is warming the Arctic more than twice as fast as anywhere else on the planet. Today, sea levels are rising more than twice as quickly as they did for most of the 20th century as a result of increasing temperatures on Earth. Seas are now rising an average of 3.2 mm per year globally and they will continue to grow up to about 0.7 metres by the end of this century. In the Arctic, the Greenland Ice Sheet poses the greatest risk for sea levels because melting land ice is the main cause of rising sea levels.
Representing arguably the biggest of the environmental problems, this is made all the more concerning considering that last year’s summer triggered the loss of 60 billion tons of ice from Greenland, enough to raise global sea levels by 2.2mm in just two months. According to satellite data, the Greenland ice sheet lost a record amount of ice in 2019: an average of a million tons per minute throughout the year, one of the biggest environmental problems that has cascading effects. If the entire Greenland ice sheet melts, sea level would rise by six metres.
Meanwhile, the Antarctic continent contributes about 1 millimeter per year to sea level rise, which is a third of the annual global increase. Additionally, the last fully intact ice shelf in Canada in the Arctic recently collapsed, having lost about 80 square kilometres – or 40% – of its area over a two-day period in late July, according to the Canadian Ice Service.
The sea level rise will have a devastating impact on those living in coastal regions: according to research and advocacy group Climate Central, sea level rise this century could flood coastal areas that are now home to 340 million to 480 million people, forcing them to migrate to safer areas and contributing to overpopulation and strain of resources in the areas they migrate to.
Take Shanghai’s megalopolis for example, which is built around the low-lying Yangtze river delta. As the fourth most populous city in the world, the flood risk in the area is high due to its geographical position. Any flooding caused by a higher rainfall can potentially be catastrophic in relation to evacuation, water management and property damage.
Global temperature rise has not only affected the surface, but it is the main cause of ocean acidification. Our oceans absorb about 30% of carbon dioxide that is released into the Earth’s atmosphere. As higher concentrations of carbon emissions are released thanks to human activities such as burning fossil fuels as well as effects of global climate change such as increased rates of wildfires, so do the amount of carbon dioxide that is absorbed back into the sea.
The smallest change in the pH scale can have a significant impact on the acidity of the ocean. Ocean acidification can have a ripple effect across marine ecosystems and species, its food webs, and provoke irreversible changes in habitat quality. Once pH levels reach too low, marine organisms such as oysters, their shells and skeleton could even start to dissolve.
However, one of the biggest environmental problems from ocean acidification is coral bleaching and subsequent coral reef loss. This is a phenomenon that occurs when rising ocean temperatures disrupt the symbiotic relationship between the reefs and algae that lives within it, driving away the algae and causing coral reefs to lose their natural vibrant colours. Some scientists have estimated coral reefs are at risk of being completely wiped by 2050. Higher acidity in the ocean would obstruct coral reef systems’ ability to rebuild their exoskeletons and recover from these coral bleaching events.
Some studies have also found that ocean acidification can be linked as one of the effects of plastic pollution in the ocean. The accumulating bacteria and microorganisms derived from plastic garbage dumped in the ocean to damage marine ecosystems and contribute towards coral bleaching.
In 1950, the world produced more than 2 million tons of plastic per year. By 2015, this annual production swelled to 419 million tons and exacerbating plastic waste in the environment. This again, can be traced back to increasing amounts of manufacturing; used plastic goods and packaging are then dumped by consumers across the globe.
A report by science journal, Nature, determined that currently, roughly 14 million tons of plastic make their way into the oceans every year, harming wildlife habitats and the animals that live in them. The research found that if no action is taken, the plastic crisis will grow to 29 million metric tons per year by 2040. If we include microplastics into this, the cumulative amount of plastic in the ocean could reach 600 million tons by 2040.
Shockingly, National Geographic found that 91% of all plastic that has ever been made is not recycled, representing not only one of the biggest environmental problems of our lifetime, but another massive market failure. Considering that plastic takes 400 years to decompose, it will be many generations until it ceases to exist. There’s no telling what the irreversible effects of plastic pollution will have on the environment in the long run.
Food:
A third of the food intended for human consumption – around 1.3 billion tons – is wasted or lost. This is enough to feed 3 billion people. Food waste and loss account for a third of greenhouse gas emissions annually; if it was a country, food waste would be the third highest emitter of greenhouse gases, behind China and the US.
Food waste and loss occurs at different stages in developing and developed countries; in developing countries, 40% of food waste occurs at the post-harvest and processing levels, while in developed countries, 40% of food waste occurs at the retail and consumer levels.
At the retail level, a shocking amount of food is wasted because of aesthetic reasons; in fact, in the US, more than 50% of all produce thrown away in the US is done so because it is deemed to be “too ugly” to be sold to consumers- this amounts to about 60 million tons of fruits and vegetables. This leads to food insecurity, another one of the biggest environmental problems on the list.
Read: https://earth.org/facts-about-food-waste/
Textile:
The global demand for fashion and clothing has risen at a unprecedented rate that the fashion industry now accounts for 10% of global carbon emissions, becoming one of the biggest envrionmetnal problems of our time. Fashion alone produces more greenhouse gas emissions than both the aviation and shipping sectors combined, and nearly 20% of global wastewater, or around 93 billion cubic metres from textile dyeing, according to the UN Environment Programme.
What’s more, the world at least generated an estimated 92 million tonnes of textiles waste every year and that number is expected to soar up to 134 million tonnes a year by 2030. Discarded clothing and textile waste ends up in landfills, most of which is non-biodegradable, while microplastic from clothing materials such as polyester, nylon, polyamide, acrylic and other synthetic materials, is leeched into soil and nearby water sources. Monumental amounts of clothing textile are also dumped in less developed countries as seen with Chile’s Atacama, the driest desert in the world, where at least 39,000 tonnes of textile waste from other nations are left there to rot.
This rapidly growing issue is only exacerbated by the ever-expanding fast fashion business model, in which companies relies on cheap and speedy production of low quality clothing to meet the latest and newest trends. While the United Nations Fashion Industry Charter for Climate Action sees signatory fashion and textile companies to commit to achieving net zero emission by 2050, a majority of businesses around the world have yet to address their roles in climate change.
While these are some of the biggest environmental problems plaguing our planet, there are many more that have not been mentioned, including overfishing, urban sprawl, toxic superfund sites and land use changes. While there are many facets that need to be considered in formulating a response to the crisis, they must be coordinated, practical and far-reaching enough to make enough of a difference.
Note: all facts & statistics in this section are correct as of June 2022.
Source: https://earth.org/the-biggest-environmental-problems-of-our-lifetime/