UCLA professor and noted author Jared Diamond (Guns, Germs and Steel and Collapse) has a great op-ed piece in the NY Times on consumption factors. Diamond defines consumption factors as the average rate people in various countries consumer resources. Key quote:
"The average rates at which people consume resources like oil and metals, and produce wastes like plastics and greenhouse gases, are about 32 times higher in North America, Western Europe, Japan and Australia than they are in the developing world."
Diamond explains that the developing world is on a path to greatly increase their consumption rates due to economic growth. He points out this potentially a huge problem - the world simply can't support 6-9 billion people consuming at the rate people in developed countries (and especially Americans) do.
Diamond suggests that the only solution is meeting in the middle with developed countries reducing their consumption rates. He points out this can be done without negatively impacting living standards in developed countries if we move to more sustainable environmental practices.
While the point of the piece was to highlight the need to cut consumption in the developed world, I was also struck by the numbers and what they mean for global trade. Diamond points out that most developing countries are working to increase their rates of consumption. He says:
"People who consume little want to enjoy the high-consumption lifestyle. Governments of developing countries make an increase in living standards a primary goal of national policy."
Rising consumption factors in the developing means increased global trade. There simply is no way for these countries to grow domestic consumption without cross border trade. China is an a good example. Their rapid economic growth has in large been part driven by cross border trade and has resulted in much higher consumption rates.
The next decade will see dramatic increases in global trade driven by the growth of developing countries. This will also lead to a wide range of new opportunities for US small businesses to participate in cross border trade. Hopefully much of this trade will be done with sustainability in mind.
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