OUTSOURCING

POLLUTION
AND ENERGYINTENSIVE
PRODUCTION

VANDANA SHIVA

a bout th e author
Vandana Shiva is a world-renowned environmental leader and thinker. Director of the Research Foundation on
Science, Technology, and Ecology, she is the author of many books, including Stolen Harvest: The Hijacking of the
Global Food Supply (2000) and Soil Not Oil: Environmental Justice in an Age of Climate Crisis (2008). She is the founder
of Navdanya, a movement promoting diversity and use of native seeds, and a recipient of the Right Livelihood
Award. She holds a master’s degree in the philosophy of science and a PhD in particle physics.
“Outsourcing Pollution and Energy Intensive Production” by Vandana Shiva includes material that has appeared
elsewhere; used by permission of the author.

This publication is an excerpted chapter from The Energy Reader: Overdevelopment and
the Delusion of Endless Growth, Tom Butler, Daniel Lerch, and George Wuerthner,
eds. (Healdsburg, CA: Watershed Media, 2012). The Energy Reader is copyright
© 2012 by the Foundation for Deep Ecology, and published in collaboration with
Watershed Media and Post Carbon Institute.
For other excerpts, permission to reprint, and purchasing visit energy-reality.org or
contact Post Carbon Institute.
Photo: Reuters. Rampant air pollution is one of the high costs of China’s rapid economic growth.

Post Ca r bon I nst i t u t e | 613 4t h St r e et, Su i t e 208 | Sa n ta Rosa, Ca li for n i a 95404 USA

Globalization has largely been seen in the context of the
outsourcing of information technologies. But the larger
outsourcing that globalization is leading to is the outsourcing
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of pollution and the energy-intensive production of goods.
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The corporations and consumers of the rich global
North thus bear some responsibility for increased
greenhouse gas emissions in the poorer global South.

Globa lization, Equity,
a n d Cli m ate Ch a nge

C

limate change today is global in cause and global
in effect. The globalization of economies has
outsourced energy-intensive production to countries
like China, whose cheap products flood the shelves of
supermarkets in the rich North and for the rich in the
South. The corporations of the North and the consumers of the North thus have their share of contributions
to increased emissions in the countries of the South.
In a globalized economy that runs on fossil fuels,
addressing pollution by setting emissions levels for
each country is inappropriate for two reasons. First,
not all the citizens of a country contribute to the pollution. As a result of becoming the world’s factory,
China has seen its carbon dioxide (CO2 ) emissions
rise from 13.8 percent of the world’s total in 2005 to
22 percent in 2006; this outstrips the emissions of the
United States and puts China in first place worldwide.
But while China produced 6.2 billion metric tons of
CO2 in 2006 compared with 5.75 billion metric tons
for the United States, its per capita emissions of CO2
were only 4.7 metric tons, compared with 22 metric
tons for the United States.
Further, much of China’s 6.2 billion metric tons of CO2
emissions could just as easily be considered U.S. emissions because U.S. companies have outsourced to China

the manufacture of goods that are eventually consumed
in the United States. Most of what U.S. superstores sell
is produced in China. As Charles Fishman reports,
Wal-Mart, which in the early 1990s trumpeted its
claim to ‘Buy America’, doubled its imports from
China between 1997 and 2002 to $12 billion. In the
next two years, Wal-Mart increased Chinese imports
again by 50 percent, so that in 2004 the company and
its suppliers landed Chinese-made goods in the United
States with a wholesale value of $18 billion.1
Consumer spending accounts for two-thirds of the U.S.
economy—and Walmart dominates retail. During the
period between 1997 and 2004, while jobs in U.S.
manufacturing fell by 20 percent, Walmart’s imports
from China increased by 200 percent.2 Americans are
shopping themselves out of jobs while Walmart’s everyday lowest price does not include the costs of climate
change or the costs of the destruction of China’s land,
water, and air. As Qin Gang, China’s Foreign Ministry
spokesperson, said in June 2007, “China is now the factory of the world. Developed countries have transferred
a lot of manufacturing to China. What many western
consumers wear, live in, even eat, is made in China.”3
Outsourcing of manufacturing is also the outsourcing
of pollution. As the outsourcing of manufacturing does
not mean that companies outsource profits, the carbon footprint should be counted in the accounts of the
1

Shiva

company that is profiting, not the country that is bearing the burden of pollution.
This inequity is not limited to U.S. companies. As
a recent report by Christian Aid states, “While only
2.13 percent of the world’s CO2 emissions emanate
from the U.K.’s domestic economy, through the process of globalization CO2 is emitted around the world
on the U.K.’s behalf in China, India, Africa and elsewhere.”4 While the exact global footprint of U.K.
companies is not known, our estimate suggests that
emissions associated with the worldwide consumption of the top 100 U.K. company products amounts to
12 to 15 percent of the global total.
In fact, the rural poor in China and India are losing their lands and livelihood for an energy-intensive
industrialization. To count them as polluters would be
doubly criminal. Moreover, when global corporations
outsource to China or India, they need to be responsible
for the pollution they carry overseas. Corporations are
the more appropriate unit for regulating atmospheric
pollution in a globalized economy.
So far, emissions trading schemes have rewarded the
polluters by giving them quotas for pollution. And these
quotas have allowed them to increase their emissions
rather than decrease them. What is needed is a carbon tax
on corporations—both for their production systems, no
matter where their facilities are located, as well as for
transport. The global economy as currently organized
is destroying local production and promoting longdistance supply on the smallest items of everyday use.
Long-distance transport is subsidized while local, low
carbon emissions production and distribution is penalized. And the high emissions of long-distance transport
have been totally excluded in the Kyoto Protocol. Thus,
while the policies of the World Trade Organization
(WTO) have led to a huge increase in carbon dioxide
emissions due to global transportation, this increase is
not even accounted for in emission reduction targets.
We need not concern ourselves with the inevitable corporate cry that regulations destroy markets. After all,
even the “market instrument” of carbon trading requires

Outsourcing Pollution

government involvement. The Clean Development
Mechanism requires the involvement of the United
Nations. Instead of regulating through trade in pollution, governments could regulate through a tax on the
use of fossil fuel and through incentives for the use of
renewable energy. We can either destroy the conditions
for human life on the planet while clinging to “free
market” fundamentalism or we can secure our future
and create climate justice by requiring that commerce
works within the laws of ecological sustainability and
within the laws of social justice.

Hunger for En ergy: Th e
Di v ersion of Food to Biofuel
Of course, the manufacturing of consumer goods is not
the only industrial process that has been aggressively
offshored to the detriment of the global poor and the
benefit of the global rich.
Biomass has always been used for energy by the global
poor, who themselves have largely not participated in the
modern fossil fuel economy. With rising oil prices and
growing concern about the contribution of fossil fuel use
to climate change, there is now a scramble for transforming biomass into liquid fuel for the cars of the global rich.
Liquid biofuels are very different from biomass energy
for the poor, however. One of the most significant differences is that industrial biofuels divert land and food from
the poor to the rich, thus aggravating the hunger crisis.
“First generation” biofuels use soybean and palm oil
for biodiesel and corn and sugarcane for ethanol. U.S.
and E.U. subsidies and energy policies have encouraged
the production of these biofuels, essentially diverting
food to fuel, thus contributing to hunger. While industrial biofuels are offered as a renewable energy solution
which can address both climate change and peak oil,
they require roughly the same amount of energy to produce as they provide. Biofuel production is essentially a
net-negative energy system.
In Europe, the E.U. biofuel industry was supported
by financial incentives to the tune of 4.4 billion Euros
($6.1 billion). If the target of 10 percent blending of
2

Shiva

gasoline and diesel with ethanol and biodiesel, respectively, by 2020 has to be met, the industry would be
subsidized with 13.7 billion Euros ($18.9 billion) per
year. This subsidy pulls food away from the hungry. At
least 30 percent of the global food price rise in 2008
was due to biofuels; by 2020 food prices could rise by
an additional 76 percent because of such diversion.5
According to FAO in 2008–2009, 125 million metric tons of cereals were diverted to produce biofuels.
Around 40 percent of the corn produced in the United
States is being converted into ethanol.6
Former World Bank president Paul Wolfowitz said in
2006 that biofuels present “an opportunity to add to
the world’s supply of energy to meet [an] enormous,
growing demand and hopefully to mitigate some of the
price effects. It’s an opportunity to do so in an environmentally friendly way, in a way that is carbon neutral.” 7
In contrast, in 2008 then World Bank president Robert
Zoellick stated, “While many worry about filling their
gas tanks, many others around the world are struggling
to fill their stomachs. And it’s getting more and more
difficult every day.”
Even when food is not used to produce biofuel—or
when non-food crops such as jatropha are used—foodgrowing land is diverted to biofuel production. Our
study “Food vs. Fuel”8 shows how pastures and common lands in Rajasthan, and rice-growing land in the
tribal areas of Chhattisgarh, have been appropriated for
jatropha cultivation for biodiesel.
There is now discussion about “second generation”
biofuels, which use cellulosic biomass rather than food
for biofuel. Second generation biofuels use forestry and
agricultural by-products, such as wheat straw and corn
straw, or crops, such as switchgrass, that can be grown
where food crops cannot. However, these biofuels are
not expected to fully reach the market before 2018. The
challenge is to separate the cellulose from the lignin,
and then reduce it to simpler sugars by applying intense
heat or strong chemicals.

Outsourcing Pollution

supposedly nonfood-competitive biofuel crops will not
be grown on food-producing land. Moreover, if agricultural by-products like straw are diverted to biofuels, no
organic matter will be returned to the soil, thus having
a negative impact on soil fertility and food security.
The biofuel market is driven by both the limitless energy
appetites of industrial society and the profits that biofuel
companies can make. Biofuel markets accounted for
$76 billion in sales in 2010, a figure which is expected
to rise to $247 billion by 2020 and to $280 billion by
2022.9 Commodities flow to wherever more profits can
be made. They do not respect rights or needs. All they
respect is profits. That is why commodification of food
has gone hand in hand with its diversion to fuel.
World Cereals Production and “End Use”
(million metric tons) 10
2007/
2008

2008/
2009

%
change

Change
2007/08–
2008/09

Total production

2,132

2,287

+1.3%

+155 mmt

Total utilization*

2,120

2,202

——

——

1,013

1,029

+1.5%

+16 mmt

To animal feed

748

773

+3.3%

+25 mmt

To other uses
(incl. biofuel)

359

401

+11.7%

+42 mmt

To food

*Utilization is a combination of production and the use of stocks from the previous
year; stocks of cereals went up from 2007/08 to 2008/09 by about 80 million
metric tons.

Thus, despite an increase in food production, there
has been food scarcity and food riots in 40 countries.
Increasing commodity production does not address
hunger; rather, it can aggravate it. In 2007–2008, more
cereals produced were used for cattle feed and biofuels (1,107 million metric tons) than for feeding people
(1,013 million metric tons). It is estimated that over
the period from 2008 to 2018, biofuel will account for
52 percent of the increased demand for maize and wheat
and 32 percent of that for oil seeds.11
Industrial biofuels solve neither the energy crisis nor the
climate crisis, and they are deepening the food crisis by
diverting food to fuel.

Second generation biofuels will also have an impact on
food. If prices are high enough, there is no guarantee that
3

Shiva

Outsourcing Pollution

en dnotes
1 Charles Fishman, The Wal-Mart Effect
(New York: Penguin, 2006), 102–103.
2 Ibid., 103.
3 New Economics Foundation, Chinadependence:
The Second UK Interdependence Report (London:
2007), http://www.neweconomics.org/
publications/chinadependence.
4 Christian Aid, Coming Clean: Revealing the U.K.’s
True Carbon Footprint (London: February, 2007), 6,
http://www.christianaid.org.uk/Images/comingclean-uk-carbon-footprint.pdf.

11 Food and Agriculture Organization, “Crop
Prospects and Food Situation,” 2009, http://www.
fao.org/giews/english/cpfs/index.htm#top;
Food and Agriculture Organization, “Food
Outlook,” 2009, http://www.fao.org/giews/
english/fo/index.htm; ActionAid, Meals per Gallon.
12 Organization for Economic Cooperation
and Development/ Food and Agriculture
Organization, “Agricultural Outlook,” 2010;
Klaus Deininger and Derek Byerlee, Rising
Global Interest in Farmland: Can It Yield Sustainable
and Equitable Benefits? (Washington, DC: The
World Bank, 2011), 15.

5 ActionAid, Meals per Gallon: The Impact of Industrial
Biofuels on People and Global Hunger (London:
January 2012), www.actionaid.org.uk/doc_lib/
meals_per_gallon_final.pdf.
6 Jayati Ghosh, “Frenzy in Food Markets,”
January 20, 2011, http://triplecrisis.com/
frenzy-in-food-markets/.
7 Paul Wolfowitz, “The Clean Energy Challenge,”
(speech at Worldwatch Institute conference
on Biofuels for Transportation, Washington,
DC, June 7, 2006), http://go.worldbank.org/
KOAHTX3L80.
8 Vandana Shiva, Food vs. Fuel (New Delhi:
Navdanya, 2008).
9 Alex Salkever, “Global Biofuels Market to
Hit $247 Billion by 2020,” Daily Finance,
July 24, 2009.
10 ActionAid, Meals per Gallon.

4

ENERGY

Overdevelopment and the Delusion of Endless Growth
Edited by Tom Butler and George Wuerthner
We have reached a point of crisis with regard to energy...
The essential problem is not just that we are tapping the
wrong energy sources (though we are), or that we are wasteful
and inefficient (though we are), but that we are overpowered,
and we are overpowering nature.
— from the Introduction, by Richard Heinberg

In a large-format, image-driven narrative featuring over 150
breathtaking color photographs, ENERGY explores the
impacts of the global energy economy: from oil spills and
mountaintop-removal coal mining to oversized wind farms
and desert-destroying solar power plants. ENERGY lifts the
veil on the harsh realities of our pursuit of energy at any
price, revealing the true costs, benefits, and limitations of
all our energy options.
Published by the Foundation for Deep Ecology in collaboration with Watershed Media and
Post Carbon Institute. 336 pages, 11.75” x 13.4”, 152 color photographs, 5 line illustrations.
$50.00 hardcover, ISBN 978-0970950086, Fall 2012.

The ENERGY Reader
Edited by Tom Butler, Daniel Lerch, and George Wuerthner

What magic, or monster, lurks behind the light switch and
the gas pump? Where does the seemingly limitless
energy that fuels modern society come from? From oil
spills, nuclear accidents, mountaintop removal coal
mining, and natural gas “fracking” to wind power projects
and solar power plants, every source of energy has costs.
Featuring the essays found in ENERGY plus additional
material, The ENERGY Reader takes an unflinching look
at the systems that support our insatiable thirst for more
power along with their unintended side effects.
Published by the Foundation for Deep Ecology in collaboration with Watershed Media and
Post Carbon Institute. 384 pages, 6” x 9”, 7 b/w photographs, 5 line illustrations.
$19.95 paperback, ISBN 978-0970950093, Fall 2012.

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