Environmental Impacts of Trade

Environmental Impacts of Trade

By Erika Masako Welch, 03 November 2023

Previously: Socio-Economic Impacts of Trade

Since 1950, world trade has grown more than twenty-seven folds in volume terms. 

The growth in global trade has risen the global CO2 emissions due to transportation. Transportation accounts for 16% of global emissions, of which freight transportation accounts for close to half (8% of global emissions). This includes road, shipping, aviation, rail, and pipeline.

Emissions from Global Trade and Transportation

As per the International Energy Agency (IEA), the total CO2 emissions from transportation in 2000 was 5.8 gigatonnes, which has increased by over 40% in 2019 to 8.2 gigatonnes. The increased emissions make their way into our waterways as enormous volumes of goods are shipped around the world. Container ships release sulphur dioxide and heavy metals into the oceans, which then enter our food chains. Besides air pollution, there’s also the matter of noise pollution, which can impact the communication, feeding and orientation of marine species. Land transport and air transport also cause pollution in addition to that caused by the maritime industry. 

Infobyte: GHG Emission by Sector (2016)

The Trade-Induced Deforestation and Biodiversity Challenge

Scientists have also calculated the trade-related ‘deforestation footprint’, which is a result of increasing levels of global consumerism and consumption culture. Forests cover over 30% of the global land surface. Not only do forests sequester carbon, but they also protect biodiversity. It is estimated that up to 40% of deforestation-related emissions are driven by international trade, especially as demand for commodities continues to grow globally. 

International trade is also linked to biodiversity losses through direct impact of transport and the induced pollution and introduction of pathogens and invasive species. Direct impact of trade on biodiversity includes introduction of pathogens, pests, and invasive species that use our global trade routes as super highways for transplantation. You can imagine contaminations effectively hitchhiking on our trade goods like timber trade, plants, and animals, boarding planes, ships, and in machinery, luggage, ballast water and on vehicles. 

Ecological Risks of Ballast Water and Hull Fouling

Ballast water, for example, is one of the major reasons for the introduction of non-indigenous species to new ports and marine ecosystems. Ballast water is water that is held in the hull of a ship, and this sea water is often discharged or collected at different ports to balance the weight of the ship. It is estimated that 7,000 species are transferred in ballast water every hour of every day around the world. Additionally, species also attach themselves to the hull and therefore ‘hull fouling’ is another cause for concern when trying to minimize biodiversity impact risk.

Infobyte: Interesting Statistics Regarding Ballast Water

Infobyte: Pathways of Introduction of Non-Indigneous Species to Europe’s Seas (1970-2020)

There are also developmental environmental impacts to consider when we build the infrastructure required to support international trade, which includes the construction and development of ports, both sea and air and roads and rail lines for land transportation. Port development has been detrimental to seashore ecosystems, including mudflats, mangroves, and natural hatcheries – often due to dredging the seashore to allow for large cargo ships to dock. Constructing and expanding transportation infrastructure can lead to habitat fragmentation, deforestation, and land conversion. 

Promoting Sustainable Trade: Policies, Regulation, and Stakeholder Action

Trade has multiple impacts including socio-economic and environmental and it is clear that actions need to be taken to mitigate these impacts. It is imperative that sustainable practices need to be adopted to reduce emissions, pollution, and deforestation. Sustainable trade is important for social well-being and equitable development with a focus on fair and inclusive trade practices, decent working conditions, and the protection of labour rights. 

Of course, stakeholders need to act and there have to be policies which regulators should regularly monitor. It is important to understand, what are the policies and regulation for sustainable trade. Trade has become a fundamental infrastructure on which the global economy today has been built. It has been a wonderous part of the positive economic development of the world over the past sixty years in particular, when globalization reached new heights. But as a major economic driver, it has significant influence – not just on economies, but on the social development and environmental impacts around the world. As the industry continues to grow into a behemoth, it has become clear that actions need to be taken to mitigate the negative impacts of the industry, while preserving the positive impacts. Sustainable trade is attempting to address these issues.

Read Next: Anchoring Sustainability: Maritime Trade Regulations and Practices

To read more about the power of sustainable trade in the race to net zero – read the full report here


This article was originally published on Lucidity Insights, a partner of Entrepreneur Middle East in developing special reports on the Middle East and Africa’s tech and entrepreneurial ecosystems. 

Related Report

Sustainable International Trade for a Resilient Future

With many countries committing to achieving net zero carbon emissions by 2050, there is a race against the clock to upgrade the world’s energy and trade infrastructure to achieve this. In this report, we highlight strategies used by trade stakeholders worldwide to foster a sustainable future, focusing on decarbonization, energy and food security, and environmental impact mitigation.

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