Dec 27, 2008

On Trade and the Environment during Christmas

The Christmas dinner is a good occasion to be with your family, with an incentive represented by the nice choice of food and meals. Traditionally on the table, a lot of local food is served, which is particularly delicious (have you ever heard about mozzarella di "bufala"?), but I really missed a nice tarte with smoked salmon. Apparently, my mom forgot to buy it this time. Anyway, the point is not much about my frustration for not having smoked salmon during Christmas Dinner. What made me wonder was the argument offered by one friend of mine to whom I expressed my little complain after dinner, when we met for greetings. He said "anyway, it's better you did not have smoked salmon, cause it's bad for the environment". Since this sounded completely ridiculous to me, I tried to provide an explanation based on the concept of efficiency and the role played by the market.

I said, that, if I want to buy the product "smoked salmon" from country A is because I like "smoked salmon" and producers in country A know how to produce "smoked salmon" at a price I find acceptable, given my preferences. If there is a problem with CO2 emissions from trade, we should take corrective actions, but let the market rule. With the right instrument (a gas-tax), we can increase the transportation costs and thus the final selling price of "smoked salmon". The consumers will then face the choice whether it's still worth buying this good or not, while governments will have some revenues to redistribute for social purposes. Over time, producers in country A will become more fuel efficient, if my demand for "smoked salmon" is still relatively high. Total welfare will not be the same, but for sure higher than what it would be by forcing me not to eat smoked salmon anymore for "environmental reasons".

After this speech, unusually long for my standards, my friend glanced at me, still mumbling over his sentence. Then the conversation switched topic when we were served a nice espresso. This no-trade-is good-for-environment argument, although completely crazy, is very effective in people's mind. I was not sure I had convinced him and I really wanted to state my point more clearly. Before leaving the "cafè", my friend approached me and said: "I don't like smoked salmon but we can have some over new year's eve dinner if you like". Once in a while, it's apparently rewarding to be a stubborn economist!!


Pierre-Louis said...

farmed salmon is bad for the environment becuz:

The waste from millions of captive fish empties directly into the ocean, polluting the water with untreated sewage, toxic chemicals, and other wastes.

Approximately three million genetically identical salmon escape from their pens each year, interbreeding with, and often out-competing populations of genetically superior wild salmon.

Captive farmed salmon make ideal hosts for highly contagious diseases and parasites; escapees spread them to wild fish.

As they grow, carnivorous and voracious farmed salmon need increasing amounts of wildcaught fish for food, thus competing directly with humans and fish species for this valuable yet diminishing resource. Currently, it takes the equivalent of three pounds of fish from the world's oceans to make one pound of farmed salmon.

It also cuases helath problems...but man do I love smoked and raw salmon...better be wild though!!!

this was taken here:

cosimo said...

Environmental damage is usually manifold bigger at the production rather than at the transport stage, and people often miss this. In advanced nations like the EU, transport accounts for less than 20% of total emissions. Much of the rest is made up by production.